He had a house that was 5 times more expensive than mine along with 2 BMW's in the driveway but struggled to pay the $200 a month for their daughter to play while another mother worked at Walmart and always paid on time.

Your numbers are in line with mine when I run the spread sheet using rent at the low end $2,500Using 3k rent bumps to 7%If there is a high rate of appreciation in the area then a lower return can be justified.

I put mine at 8%, it seems to work for my conservative estimates(my current rate is 7.3).

A good friend of mine turned me on to multi-family housing investing awhile ago and I decided to take the plunge.

On the rental side , most of mine have been no more than $18,000 and renting from $500-700 per month.

I have a full-time job and consider real estate investing to be a solid hobby of mine.

For the slumlord or the investor in Cleveland/Detroit, etc who can purchase those 2% properties for $20K, then I'd say definitely try to pay off and go all cash.But from your post above it sounds like your strategy is more similar to mine - buy the middle class $100K +/- homes that rent for $1200+ month.

View properties at your leisuresubmit offers (even if low balling) without regard to someone else's time.post your own properties on the mls and earn seller commision.data mine the mls system historical archives for insightsCreate custom alerts using your own parameters"Short sale", "handyman Special", etc....

Mine was arranged by a mortgage banker at a bigger national lending company, but the construction loan piece came from a 1 branch bank, then it was refi'd when my rehab was complete by the mortgage banker.On the construction loan, they did an appraisal and estimated ARV based on the items I said I would fix/update, etc.

In Baltimore, there are many properties that do not have central air...mine included.