Cash-flow verus equity

The cash flow on rental properties will be significant only when you reach a high number of properties. It is important to have positive cash flow and reserve to cover the occasional 'surprise expense': water damage, roof repair, etc.
However you are right that in the long run, the true wealth creation comes through equity build up (someone else paying your mortgage) and appreciation.
Both appreciation and equity build up can be realized tax free through either a cash-out refinance or a 1031 exchange.
Over a long term the exponential effect of compounding will make you wealthy in real estate.

As you are considering real estate investing, you must decide what is more important: "building wealth" or "building income"? When you say "making money in real estate", it could mean either/or.
a) Let's say you are recently laid off or perhaps ill and cannot work to pay your bills. It would be more important (in RE investing) for you to start getting some passive income to cover your personal expenses. You could purchase some rental properties that generate a few thousand dollars a month and provides you income to live. Appreciation (for wealth-building) would be a secondary concern, if at all.
b) If you continue to work and do not need the passive income, then you should focus more on properties where appreciation is the goal. House flippers are a prime examples of this type of investor.

Both strategies "make money", but only YOU can answer which is the right one.

Kevin

The way you accumulate wealth is to have someone else 'build' equity into properties that you own. As far as 'to make money', I believe the old saying is, 'You make money in real estate when you buy'. However, it doesn't mean you can just go on MLS and buy whatever property that is listed. You must do your research, due diligence. Is the area an up and coming? Do you buy and hold? (not necessarily means to rent, but to buy and potentially sell a few years down the road as the area develops, or even build at that time and sell for market value) How are the schools? What is your risk level? Cash-flow is an element to 'make money' in real estate investing, and the majority of people shouldn't buy a property unless it cash flows. However, it is not the only aspect to consider. While someone is 'building equity' in your property, there are many things you can do to increase it's value. Starting with finding the right tenant. I personally would give up some cash flow, if the tenant was taking care of my property like it was their own. But, if you're looking for supplemental income, cash-flow may be what's best for you, for now. By now you probably have guessed that I am passionate about the topic. I have been helping investors for quite a while now and also invest myself. I'll be more than happy to carry on the discussion with you further, just click on my profile and shoot me a message.

That will depend on your goals and risk level tolerance. If you are looking for cash flow the more money you put down the better and the more you control your expenses the better. If you are looking to collect your return at the sale of your property than then it's about taking your cSh to best position the property for the max sales price when that time comes. You will want to talk to your CPA about depreciating the property and how that helps your goals, as well as using tax deferred exchanges for acquiring more properties.