So you could only receive $50k in your first 6 months of ownership since the LOWER amount is your purchase price.Example 2: If you purchased a home with $80k of cash, put $5k into the home, and the home was worth $100k. 75% would be $75k and your purchase price is $80k…so the lower amount is $75k.My example above does allow me to get 70% of the cost (70% because its Teri plex)immediately, once the renovation is completed (additional cost added to the Settlement statement ) without waiting 6 month. 

That %3 comes in handy when they know the price is getting lower and lower the longer the property stays on the market

@Lee Ripma: I am aiming at Seattle or Texas (a few areas), both have no income tax but Texas is obviously a much lower COL.

It is also true that the prices in the midwest is much lower compared here in Cali.

The IRS does not like shifting of income/expenses simply because the tax due to the IRS will be lower.

They got my taxes lowered, and it took minimal effort on my part.

.#1....If it is a live auction...go...see who bids....talk to them...find out what their strategy is...take them to coffee, take them to lunch....offer to help do leg work. 

My question:  From a purely real estate investment standpoint, is it better to buy something in the lower range that may have a bigger return on investment?

If you bring me a deal, it needs to have an advantage- 1) Reduced price from retail 2) Better condition - (so Its move in ready) 3) lower than market rents 4) Financing Terms, Etc.

Very easy to post on there and in the process will give you maximum exposure where the eye balls are.For the lower income areas we are seeing about 50/50 between the Zillow partner sites and Craigslist.