Real estate has a lot more involved - loan paydown, potential tax advantages, time spent since it is quite a bit more "hands-on" than the stock market, repairs/maintenance etc.

Any deal with upside potential (expense reduction, renovations to drive revenue, undermanaged property, etc) the in-place cap rate may hold very little relevance to the deal.Per your follow-on question about generating higher returns: you are 100% right.  

Maxwell AFB’s presence in Montgomery is definitely an important factor, though keep in mind that just 12,500 people (out of roughly 386,000 people in metro Montgomery) work for the Air Force.As for the difference between the two cities, I’d say that there’s slightly higher appreciation potential in Birmingham.

If these places are generating positive cash flow, what potential red flags should an investor be on the lookout for?

You're definitely going to need a tax accountant, and RE attorney to help you out on this one.If your properties are under a company structure, maybe adding the children as partners to the company with some sort of dilution of shares tactic that can mitigate your potential inheritance problem. 

So when I speak to a potential client I do not pass them on to a team.

Not sure about state laws for the insurance payout angle but if possible, you can always try and get a contract to purchase for much lower and close after seller receives insurance proceeds, then you can potentially have equity and a deal.But based on your existing numbers, taking it down as you stated would not be a good deal in my opinion and based solely off the info you have provided thus far.

I've followed that a little and know there are reports of people not being able to sell their home because they're in a zone that's well past the cap, and so the pool of potential buyers -- which would otherwise include potential vacation rental buyers -- is reduced.I think that's slightly different that the repercussions that could be felt by this Colorado law.

@Ryan Espinosa Newly passed Proposition 19 will have potentially severe financial consequences for children inheriting property from their parents.

The court determined the requisite intent was proven by the taxpayers’ efforts to rent the home, including placing flyers in nearby areas and showing the property to potential renters, demonstrated their intent to hold the property for business purposes.)See Goolsby v.