Look for long term growth in jobs and population.

There isn't a 30 yr period of less than 11% growth throughout its history.

The low money down and the ability to utilize a 203 B or K, that program is pretty nice. 

That is a reasonable conclusion for the markets that do actually have growth. 

Additionally, we have been able to drive significant rental income growth as a vacation rental property and I'd now like to try to unlock some equity to fund our next deal.

The younger you start investing, the better as you have the ability to leverage time. 

That may affect your ability to rent or get a rental permit.

@Eric Hrlbock My boots my notepad my basic knowledge my team work my ability to learn quickly.

I can tell you from experience underwriting deals for a number of institutional and semi-pro investors that they have achieved IRRs greater than 15% and yields greater than 8% in markets like San Francisco, LA, NY, and DC that advertise 4% cap rates.Markets with low cap rates typically share the following characteristics:1) Strong rent growth, driven by2) Strong population growth, driven by3) Strong job growth4) Low vacancy5) High per bed rents (lower operating costs as a percentage of total rent)6) Good property management options7) Higher quality tenants (young professionals like myself will rent in SF until their late 30s to early 40s)To achieve returns in these markets, investors buy buildings with significant value-add or development opportunities on very low to no leverage (debt), and refinancing the deal after stabilization to cash out.

When the title company, escrow agent or attorney prepares the closing documents, they simply factor in the second mortgage payoff amount into the final distribution of funds to the seller.A second mortgage should have little or no effect on a homeowner's ability to sell her home.