I looked at one thats currently up for funding. There's $26k in transaction costs that have nothing to do with the equity in the house, those are sunk. If they hold the property for 10 yrs and then sell, they would need the property to appreciate by 2% each year just to maybe break even on the transaction costs of buying and selling. So disregard their "appreciation" estimate portion on annual return. You are left with 4% rental income return on your investment "if" everything goes well. If you have a tenant that doesn't pay and squats in the home for 6 months before they can evict, housing prices drop, tenant gets pissed off and dumps concrete down the drains, etc then you are out a lot of money. I would rather invest in US Treasuries if you are happy with 4% returns.
