On the other side of the coin, you have pharmaceuticals companies, who often have negative level of net debt (debt - cash) because if their next break through drug may not get approved and their sales will drop.Thought should be give some thought to what space we are in when thinking about what net debt levels we want (overall leverage and how fast to pay down debt/how much cash to hold).

Putting a $200-$300k downpayment on a negatively cash flowing property in SF Bay Area would easily cover at least 10 down payments on 10 different Midwestern properties that each have a CAP rate of 8% or more.

As an aside Jeff when I had my little boutique real estate shops.. this is how I would help the new agents that came to work for me. instead of the team concept ( I did not really want a team) I would hand out my properties that I would normally list myself or my wife would.. and we would give them a 1% list fee.. average price points 250 to 500k.. so it was not nothing but not normal.. but it got the newbie in the MLS so in a way it was paid training..

I know there is a concept of loss of rent insurance if there is a fire or something. 

This means that they are borrowing money at 6.5-7.5% interest rate to buy a 7 cap... which means either neutral or negative arbitrage between the purchase and the cap rate. 

Also a $5k increase over asking will add $21 to your monthly payment and may be enough along with the note.Remember even with a break even or slightly negative cash flow, you get the mortgage paydown, tax benefits and the rents will go up over time.

Keep in mind almost all the negative reviews come from angry tenants that were kicked out.

There is a legal concept called "unjust enrichment" whereby she would owe him.

If you do hire property management you probably won't cash flow, which negates any reason you might want to do this for most new investors. 

This creates a negative initial position.