Then after 10, 15, 20 years they are underwater on rent and the property is in disrepair.

My concern is if the market takes a downturn and the mortgages go underwater. 

Being underwater on a property as a new investor in this economy wouldn't be fun.

Quote from @Gil Segev Here are some updated numbers from a property I saw today:4/2, 1600sqfPP: 520k, 25% down, 6.5% interest MTR: $4000PITI: $3500Rehab: 0, property just finished a high end rehabCapEx: 2%, all major systems are new: roof, water heater, HVAC, electricalMTR PM: $330 (8%)Utilities: $300Vacancy: $200 (5%)Overall sightly underwater.

I can't think of a good reason, other than maybe being underwater in a house that won't sell, that a vet would allow a non-vet to take ownership of their entitlement.

Hi Rich,When New Orleans flooded, the Government declared whole areas off limits, and some trespassers into those areas were rumored to have been shot dead on sight.Tough to collect rents when your places are underwater, but I think the sea water handled (most but not all) evictions (Stuff Happens).During a disaster the Government is going to do what it has to for the common good.Just my 2 cents!

.: Careful, the whole place may be underwater by 2050....  

One mistake and you can be completely under water.

Out of three suites, there are two vacancies, and it's underwater, but will be cash flowing when I get my next tenant in there, even with a reduced rent.

When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then.