On a flip the math is simple if you are all in at say 200k and ARV is 260k you need enough margin to cover 10 to 12 percent interest, 2 to 3 points, holding costs, and still clear at least 15 to 20 percent on total cost or it is not worth the risk.

@Warren Powers How much of a margin do you account for 5%, 10%, 15%?

Market shifts and expenses can narrow margins quickly.

In Cincinnati specifically, I’d want to look closely at:• Current rent vs. market rent (unit-by-unit)• Deferred maintenance and capital expenditure schedule• Utility structure (separately metered or owner-paid?)

The profit margins can be significant in the Bay Area but those investors usually have a lot of capital and experience. 

Tighter lending, higher insurance, and thinner margins are making patience a strategy.A lot of investors are realizing that immediately repeating the cycle — without reassessing numbers — can compound mistakes fast.

Discounts tend to widen quickly when there is limited seasoning, incomplete documentation, or marginal equity.From a buyer’s standpoint, a performing note becomes an easy decision when the risk profile is clearly defined and conservative.

$20k can be enough, but whether it’s “safe” depends less on the number and more on structure and margin for error.For a first out-of-state deal, the biggest risks usually aren’t the down payment — they’re reserves, property management, and having room to absorb surprises without forcing bad decisions.In many cases, starting smaller or closer to home helps you learn faster with less downside, even if it feels slower on paper.

Also once you’re in that range that’s commercial debt territory so you’re either self managing or giving up margin to a PM.I’m biased towards larger multifamily larger multifamily syndications, but even then, one passive investment at that level isn’t hitting 10k that fast.

Your CPA's take on REP status and how the depreciation hits your specific tax situation4.