If you have a large down payment (or the ability to cover negative cashflow), the East Bay's appreciation and principal pay-down benefits have been historically very strong compared to other markets.  

The best testimonial is a previous client which we have many.  

Let's say I have 500k down payment and borrow 500k, and the monthly mortgage payment is 5800, and out of that, 4800 is mortgage interest, and I pay 2500 annually for insurance and 10000 for property tax, could anyone please let me know how much UBIT I would be subject to?

On a $200k loan you will pay $10K more per year in interest, or $850 more per month. 

-Lease to buy @ $930,000 (currently appraised at $890,000)-2 year term with option to purchase at the end of term-Non refundable 3% option fee of $27,900 -Rent $4700/month If purchasing at end of term: Option fee applied to purchase and 10% of all combined monthly rentIf not purchasing: Option fee is non refundableSeller able to break contract anytime with 60 days notice if agrees to pay renter 2x amount of option fee.

We have many homeowner clients - all over the country - with Smokies investments.

Seller i hesitating to pay Capital gain tax as a lump sum payment. 

Thanks in advance.Entitlement risk is huge so some developers will be willing to pay a lot for shovel ready. 

-Don't buy now, I'll take the deals for me and my clients.

Without that, you have to be able to not only pay your own expenses, but also your first rental plus your second rental mortgage (at least on paper) with your other sources of income (ie money from your W2 job).