FNMA offers Homepath financig for this home, and I heard that inflates price somewhat, but I think 2x is ridiculous!

Never use figures from an artificially inflated market of over 5 years ago, those numbers are meaningless.

Condos/townhouses are enticing, but I know the HOA/fees situation is never good and can inflate on you also.

Travis, there was an article today in the UofM newspaper about some private student housing going up for next year.http://www.mndaily.com/2011/03/30/apartments-rise-vacancy-stays-flat

I can see prices starting to rise, someday (not yet).

Any stock that has consistant dividends like that will most likely see a huge price rise, thus lowering returns for new investors.

I promise to always keep rent increases as low as possible, striving to keep up only with the rate of inflation and market value.

So, it's hard to look at any Bay Area investments from a pure cash flow perspective and have them make any sense;- While 7% isn't great, when interest rates start to rise, it's likely that rental rates will rise as well.

So, to rephrase this, you took a tenant with poor credit and you want to turn him into a buyer at an inflated sale price and you want to know if you can do this on an installment contract?

It is inflation adjusted and based on the highest three years of pay.After 22 years of service and 80,000 invested into it, I will receive approximately 25,000 net per year in benefits.25,000 net, divided by 80,000 is a 31% return.