Even worse, that fraction is very likely to increase over time because your basis decreases (because of depreciation) faster than you pay down the debt.

Others projected an 18% DECREASE by the end of 2014.

Home insurance could increase, rents could decrease, the estimated 40% for expenses will increase every few years as the property ages—as will the cash reserves for maintaining the property, and eventually something will have to be done increase the cashflow.

Guess I have been reading the wrong books as numerous sources link the stock price increase/decrease to whether buying or selling.

Eddie, do you think the rent decrease is based on the fair market rents going down in this section 8 blighted area?

Many lenders are also slashing down prices to decrease the number of REO properties.

So if Sally is able to find a buyer for me then she has an opportunity to make another 3% on the B to C.I'm under the impression that if the lender sees 6% going to the same agent (if the agent is representing both the seller and buyer in the A to B) then they will try to cut that down, so using a separate buyers agent (my friend) on the A to B will decrease that likelihood.Let me know what you guys think.

I think what both of you are saying is that likelihood (or probability) is less when you are not leveraged (fewer units) , The impact could be more severe than if you leveraged and owned more units Let me quantify Basis From example above $300K start with $50 K houses / Rent $750 Expenses (%50) $375 ( you still have taxes and insurance regardless if you carry a mortgage or not) Appreciation 5% Option 1 Buy 6 $50K houses free and clear Starting equity = (300K value – 0 Loan Balance) = 300K Income = $750 Expenses (%50) $375 Cash Flow $375 Times 6 units = 2250 Month (same as Mr Duncan Demo) Option 2 Buy 12 $50K houses ($25K Down, $25K Financed) Starting equity = (600K value – 300K Loan Balance) = 300K Income = $750 Expenses (%50) $375 P&I (25K at %5 for 30 years yields monthly payment of $134 Cash Flow $240 Times 12 units =$ 2880 Month Risk assessment / Management While the probability of getting a bad tenant is more with the greater # of units, The IMPACT would be less: Risk Analysis Hazard : getting a bad tenant that late/skips on rent Effect: you lose one months rent ($750) Probability of Incidence (PofI) = in our example 1 in 20 (5%) Option 1 PofI = 6 units *(.05) = 30% chance Impact + (-$750 cash flow ) -> Net cash goes from $2250 to (2250-750) $1500 a (%33) decrease Option 2 PofI - 12 units * .05 = %60 chance you get stuck Impact = ((-$750) cash flow -> net cash goes from $2880 to (2880 – 750) 2130 = 26% decrease So while the chance Is greater with multiple units , the impact is lessoned due to the other income streams.

Obviously, when rates go up the borrowers' dti changes and loan amount decreases.

There also seems to be a decreasing return on investment for some renovations.I would imagine as I get older I would prefer to be less hands on and could move in the direction of commercial real estate where property management is definitely built in.