The upside to that risk is that I would be banking on appreciation and later increasing rents, and after all that sounds better then sitting on my money for 5 years until the next market cycle.

Unless you are a seasoned contractor that can do all the repairs yourself or you are generating a lot of monthly income why would you take the risk? I

Do you follow it like a SFH and do about 10% or push it up a little because of the risk?I

He told me without being a realtor it could be risky.

I just think it's less risky and higher appreciation potential.My 2 cents... :-)

Sounds like the consensus here is that this is fairly risky as I'm 1) assuming that the property value doesn't drop substantially in the next 2 years and 2) hoping that the tenants don't trash the place to the point where I wouldn't be able to sell it.  

Assuming the risk is part of solving the sellers problem which I am baking into the discounted price. 

I'm thinking that as housing prices rise, if SHTF, I can always dump one of the rentals and use the profit from appreciation to mitigate any crises.Is this a risky/unwise way of thinking?

Is this a real risk I should worry about? 

Obviously, I am not generating the volume most of the other posters are talking about, but I have made some good deals – comparable to the two I have purchased on the courthouse steps and far less risky.