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But, be aware you could become a millionaire on paper, but be house rich, cash poor. And, remember, pulling cash out as a refinance still has payments connected with it. Many new real estate investors who start out in investing in rentals, find themselves in a difficult situation because they are paying out more than they are earning in income. Read about Casey Serin who is a young "would-be" real estate investor who bought 8 properties, and wound up in financial disaster, and foreclosed upon. Unfortunately, when going to expensive real estate investment seminars, with a lot of hype, sometimes the entire story is not told, and a lot of people get themselves into that type of situation, but usually on a smaller scale.

* A duplex, triplex, or quad unit is more probable to produce cash flow. In some areas these are hard to find. Make sure that when the unit is converted to multiple rental units, codes are followed for the apartments to be legal. (like separate utilities) Also be very aware of sound transfer issues. If you have multiple units in a home, but are constantly complained to about sound issues, you won't keep renters.

* For each rental unit, it is crucial to keep at least $5,000 in reserve. This is for unexpected repairs, and the inevitable vacancy period. Adjust this figure, according to the mortgage payment, and the life expectancy of systems, and appliances in the unit.

* Use an application for tenant applicants, a fee charged is okay, and screen the applicants in four areas. Previous landlords, employment, credit, and criminal background. Be sure your application gets signed permission of the applicant to check in these areas. Watch for the prospective tenant that has people set up to falsely respond to the landlord, and employment areas. Verify in more than one way. Also, to see first hand how a prospective tenant takes care of a home, some landlords have some of the forms filled out at the tenants residence. Others will try to determine this by the condition of the car.

* Have a strong lease. Be sure to know the landlord/tenant laws in your state, and form the lease from that. Just like any legal documents, you may need help understanding the interpretation of the laws in your state.

* As a landlord, you set yourself up for a tenant thinking you are very rich, and their attitude can be that you can afford anything, and what they do, is justified, to so call " level the playing field." You are also the property manager... refer to yourself as

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