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Two things:

A correction. My initial investment in our Boston condo was $5,000, not $10,000. I was chatting with my father about it (because it was top of mind thanks to this thread) and he reminded me that the downpayment was $5,000. He should know, because he loaned me the money for it ;) So my $5,000 "investment" mushroomed to $550,000 in 30 years. Not shabby. Better than a 15% annual CAGR across three tumultuous decades, even discounting terminal value for fees and taxes.

Indeed. Also, if your equity falls below 80%, you need to get PMI, which as I have found is becoming harder to get. I would think also that there would be issues with documenting income for someone who is no longer working, especially if one retired early but is not drawing SS income yet.

I have little doubt that I could get a $300,000 mortgage on a property valued at $550,000, which has been in continuous rental for two decades and which is cash flow positive. The only reason to do that would be to make the property "break even" to avoid taxes and perhaps to leverage up into a second property, which people building wealth in the real estate sector do all the time. A friend of ours is a "realtor", which is to say she sells houses to people, but what she really does is find dogs which are easily fix-up-able, buys them outright, and then turns them, and yes, she did it before, during, and after the crunch, so there is still money out there and loans to be had.
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