Hi Evan,It depends on your risk tolerance.

Michael,nothing wrong with that to start out, but only use what you need to get the house and some repairs if need be, mortgage the purchase. you want to try and keep as much of your personal money, personally for your own emergencies. then you can start using your investment properties as a vehicle to fund other investment properties without touching your own money. my rule of thumb is never be in dept for more than 50% of your net worth, but that's what i am comfortable with, that's up to your own risk tolerance.

That way they can get their feet wet while determining their own personal risk tolerance.

Their strategy (for simplicity of explaining) is to never pay off your debt, simply keep borrowing to keep your average LTV on your portfolio at a level that meets your risk tolerance, maybe 70-80%.  

Your options really depend on a lot of factors such as how much cash you have, your risk tolerance, how much the house is worth, how much the rehab will be, etc.My gut says to start advertising for an end buyer such as a rehabber and see if anyone jumps on it.

Here is the mathematical equation:Assets x ROI = Cashflow > Expense BudgetHere are the steps:Determine you annual Expense Budget based on how you want to live.Example: $75K/yearDetermine your Return on Investment based on your Risk Tolerance.Your Risk Tolerance is based on how wiling are you to risk losing it all when it comes to your incoming producing properties to where you would have to go back to work.Use a scale of 1-100, 1 = cash in mattress and 100 = I'm gambling the rent money a the craps table.Take your Risk Tolerance # and divide by 5 to calculate your ROI.Example: Risk Tolerance = 50, ROI = 50/5 = 10%Income Producing Assets = Expense Budget/ROIExample: $75K/10% = $750K in income producing assetsFor real estate, Income Producing Assets = Property Equity, not the market value of the property. 

Less time suggests Buy and Hold vs Stock market index fund.2)  Risk tolerance?  

(For buy and hold - not as  much for rehabbing) Because like you ask it depends on the persons risk tolerance and goals; cash flow or appreciation.Up to now I have basically bought for cash flow and because the deal was too good to pass up.

I suppose it just depends on your risk tolerance!

You'll get an idea of my risk tolerance, what I'm comfortable with, but you'll have to convince me that I'm safe.