Cash flow is not always king in the Bay Area, but without diving into it too much you did pretty darn well in equity!

What if there is $35k in equity from day one- would that be a good deal? 

You could have 1 million dollars in equity and 500k in debt in 2007 and then the housing market bubble crashes and suddenly your equity is only sitting at 500k, but your debt is still 500k.  

I gained almost $200k in equity within 5 years, and only put $10k down.Now I think it's time to put that equity to use.I'm thinking of purchasing a 4-plex in McAllen, TX.

There's one listing on there, it's been on the MLS for about six months and the listings on myhousedeals claims that you just buy it at the asking price and it's already got $50k in equity built in, no need to renovate.

Although I would stick with the cashflow until your return in equity goes unfavorable.  

So if you have $200k in equity and your return is $18k per year that's a 9% Return On Equity, or if you have $300k in equity that would be a 6% Return on Equity.

I have one rental in Norfolk and another in Northern VA with a combined $150,000-175,000 in equity.

His cash flow is ridiculous and I suspect he has around $750,000 in equity.

So if you have $245k in equity and your return is $32k per year that's a 13% Return On Equity.