I'm older than most on Pockets and have lived through some interesting times. This current situation is really concerning me. I'm not a turtle pulling into my shell, BUT, there is a perfect storm forming and it is hug...

How deep is that pipe buried? 

Then take a deep breath cause that's just the start of your due diligence :).  

Blue unemployment on left axis, and red 1995 indexed Silicon Valley home prices on right:If you look back to when we were leading up to the dot-com crash, you'll see that Silicon Valley maintained unemployment below 4% for almost an entire 5 years between 1996 and 2001.

The first investor is me who I describe in the paragraph below and the second investor is someone who will put less down with the intent to acquire 4 duplexes.Keep in mind the total rent paid for both units in each duplex is $2,100.Total Fannie Mae conventional loan amount:$180,000Loan Term:30 yearsInterest rate:5.25%DP @ 25%:$45,000Closing costs @ 3%:$5,000Mortgage Monthly payment which includes property taxes:$998.84Insurance:$142.00Sewer, Water and Garbage:$104.00Average monthly expenses:$150.00Renovation and painting expenses for early 2015:$8,000Roof in 8 years:$11,000The second investor decides to go with an FHA loan so that they only have to put 3.5% as a DP.Here are the specifics.FHA Total loan amount:$180,000Loan Term:30 yearsInterest rate:5.25%DP @ 3.5%:$6,300MIP:$123.04Upfront FHA MIP:$3040.00Monthly taxes:$250.00Insurance:$142.00Sewer, Water and Garbage:$104.00Average monthly expenses per duplex:$150.00 X 4 duplexes = $600.00Monthly Mortgage payment:$1,491.00Closing costs @ 3% rolled into loan:$5,000Renovation and painting expenses for early 2015:$8,000Roof in 8 years:$11,000 per duplexTotal money required at closing for purchasing duplex using FHA loan:$14,340Using that figure, investor 2 can buy 3 duplexes and cannot afford a 4th home.That leaves investor 2 with $6980 as disposable cash.So investor 2 borrows$7360 (loan term=72 months)from Family at 8% to help buy duplex #4.Private money lender monthly expense:$110.40Investor #1 monthly cash flow per duplex:$705.16Investor #2 monthly cash flow per duplex:$244.60 X 4 duplex’s = $978.4*As you can see Investor #2 has more cash flow each month.2014Investor #1: NOI 2014 = $8,461.92Investor #2: NOI 2014 = $11,740.802015Investor #1:$8461.92 (NOI 2015) - $8000 (Code violation to paint 1 duplex for $3,000 and renovate unit #2 @ $5,000)= $461.92Investor #2: $11,740.80 (NOI 2015) - $32,000 (Code violation to paint 4 duplexes for $3,000 each and renovate unit #2 @ $5,000 each) =-$20,259.202016Investor #1: $461.92 (2015 balance) + $8,461.92 (2016 NOI) = $8,923.84 (2016 Year end Gross) Investor #2: -$20,259.20 (2015 balance) + $11,740.80 (2016 NOI) = -$8,518.40 (2016 Year end Gross)2017Investor #1: $8,923.84 (2016 balance) + $8,461.92 (2017 NOI) = $17,358.76 (2017 Year end Gross)Investor #2:$8,518.40 (2016 balance) + $11,740.80 (2017 NOI) = $3,222.40 (2017 Year end Gross)*It took 3 years for Investor #2 out of the Red.2018Investor #1: $17,358.76 (2017 balance) + $8,461.92 (2018 NOI) = $25820.68 (2018 Year end Gross)Investor #2: $3,222.40 (2017 balance) + $11,740.80 (2018 NOI) =$14963.20 (2018 Year end Gross)2019Investor #1: $25820.68 (2018 balance) + $8,461.92 (2019 NOI) = $34282.60 (2019 year end gross)Investor #2: $14963.20 (2018 balance) + $11,740.80 (2019 NOI) = $26,704.00 (2019 Year end gross)2020Investor #1: $34282.60 (2019 balance) + $8,461.92 (2020 NOI) = $42744.52 (2020 Year end gross)Investor #2:$26,704.00 (2019 balance) + $11,740.80 (2020 NOI) = $38444.80 (2020 Year end gross)2021Investor #1: $42744.52 (2020 balance) + $8,461.92 (2021 NOI) = $51206.44 (2021 Year end gross)Investor #2: $38444.80 (2020 balance) + $11,740.80 (2021 NOI) = $50185.60 (2021 Year end gross)2022This is the year the roofs need to be redone on the duplexes.The cost per duplex is $11,000.Investor #1 – Total cost for new roof on single duplex building = $11,000Investor #2 – Total costs for new roof on 4 duplex buildings - $44,000Investor #1: $51206.44 (2021 balance) + $8,461.92 (2022 NOI) - $11,000 (new roof) = $48,668.36 (2022 Year end gross)Investor #2: $50185.60 (2021 balance) + $11,740.80 (2022 NOI) - $44,000 (4 new roofs) = $17,926.40 (2022 Year end gross) After 9 years as you can see Investor #1 has $48,668.36 in savings and Investor #2 only has $17,926.40.My conclusion up to this point is that having more properties may bring in more cash flow each month at first, but expenses can wipe out those savings quickly.Eventually the cash flow from investor #1 should outpace Investor #2 as proven by the larger balance.Let me know what you think from my example.I tried to keep everything completely even between the two investors, the only difference is the way the two investors choose to spread their intitial cash.I’m personally more in favor of doing it my way.

Even if you found a member from California who has done something similar you could have some local ordinance or other red tape that could bite you later.

Banks have too much red tape and procedures they have to file before they sell.

Also the Universal Life thrust in retirement planning is a red flag, to me, because of the high upfront commissions involved and needless complexity often imposed in these products. 

Often the more expensive ones have sales ladies with deep cut tops and tight skirts.

Jetted tubs are not mandatory, but deep soaker tubs are.kitchens with islandsLittle extras like a pot filler above the cook top, 2 dishwashers, double convection ovens, appliance garages on the counter tops, "wired" homes to plug in MP3 players in roomswalk-in pantryspacious laundry room with a sink and room to hang/foldYou can put carpet in the bedrooms.