If they routinely trade at $45K per unit then you’re probably buying a ton of built-in equity.

Still, if your values are as you expect you some built in equity,  I would say if you can afford to bankroll a hiccup or a belch as it were, then this is a long term play that could pan out. 

This number will give you indication of you will have lots of gain in equity to distribute or if you will have little equity to distribute.

I am with Jay, sounds like you found a seller finance deal with $50k in equity because it needs $50k in repairs. 

If I got your numbers right, you would have ($235,000 - $135,000 - $12,000) or $88,000 in equity and it looks like it would cash flow pretty well too.

If you are a new investor, probably you will not have a lot of assets and/or equity to worry about (but even that is relative and subjective to each person tolerance to risk) so I would not worry about that till you pass that risk threshold (in my opinion 100K+ in equity, maybe 50K if you are really risk adverse).

I have roughly around $140,000 in equity. 

.- Assuming a $200k house with 20% down and $200/mo cashflow,  - If you throw cashflow at mortgage every month, you will pay it off in 20.5 yrs as opposed to 30  - You definitely increase net worth faster by doing this (an extra $3,948 at year 10, which is pretty small, but still something compared to the total $24,000 cash you would have saved over the course of 10yrs at $200/mo)  - You hit $80k in equity at 6yrs 5mo as opposed to 6yrs 8mo    - this is the real advantage because it allows you to acquire another property faster, but there is a very small difference here- Overall, I would say following about this strategy:  - only do it if you are confident that low-interest fixed-loans will be available 6-10yrs down the road when you would be looking to refi    - would be a shame to lose that advantage for the small extra advantage of paying down mortgage over that time period  - this still seems like a no-risk, no-tax savings account or bond    - instead of parking extra income (from job or whatever) at bank with minimal returns while waiting to buy another property, "invest the money in your mortgage" by paying it down   - I suspect this strategy might start to look better if you had an extra $1-2k/mo from job to put into this to really supercharge equity which is what David was talking about in book, but I'd have to crunch numbers more           - of course, have to make sure that refi closing costs won't wipe out any gains, and you don't risk losing a low rate fixed loan as @Robert Purcell said    - also, I suspect that nominal stock market returns of 7-10%/yr would outperform this (even with capital gains) because the money will be invested for 6yrs before pulling out for a new down payment (which means long-term capital gains as opposed to short-term and you have a better chance to smooth out stock market cycles so portfolio doesn't crash when you want to liquidate and use it as a down payment for property), but I'd have to crunch numbers more- Interesting idea to tune results, but I don't think I'll use it any time soon.

I refinanced my house in November and gained 70k in equity in 5 years and knew there was money to be made here somewhere.

I am thinking of selling one my properties in California that has 200k in equity in order to to a 1031 exchange and purchase a MFR.