I've always worked on my stock market portfolio and real estate was just a dream.  

- Total Stock Market Index Fund- Total International Stock Index Fund- REIT Index

The cap rate does not predict cash flow or profitability, only the markets perception that the lower cap rate will be less risky to collect the same NOI.I'm between the Aquarium and the Outrigger Canoe Club now next to Jimmy Buffet's new place.  

Also, properties in these areas tend to be older housing stock which will mean more maintenance issues and the tenants in general will be harder on the property in lower income areas.  

In my case, the buyer is the owner lock, stock and barrel.

I agree with Adrian,  a buy and hold strategy is similar to buying stock.

You can never predict when something goes up or down in software/internet.

Your ROI is magnified when using debt - regardless if it is autos, houses, or stocks. 

I've been with the same company since college (8.5 years) and I make a decent income.We have some money saved in the bank ($7k) I have company stock in the amount of $4k, and have a good amount in my 401k.

This is essentially the same as acquiring an option to purchase a company's stock or a commodity.I would recommend having no performance ties between the two agreements and would stay away from inflating either the market rent or the purchase price of the property and applying/rebating a portion of the rent towards the purchase price of the property.