Are you reserving for cap ex, maintenance & vacancy?

Hi @Akintunde AboabaIf you want to reduce your risk of difficult tenants, choose a province with fair landlord-tenant laws, like Alberta, and not BC.

I plan to put a $600 utility cap in the lease.

I self perform most of my construction at this point and find it very difficult to make ground up construction pencil in Philadelphia unless I am selling for $400/ft.

I'm wondering about any potential regulations that might make this a more difficult process than I'm anticipating. 

., Purchase Price: $475,000 ($197.9/sq. ft.).Estimated Market Value: $402,000 ($168/sq. ft.).Financing Terms: 2% interest rate, with a 9-year balloon.Unit B Income: $2,049/month (Section 8 tenant through November 2025).Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.Monthly Loan Payment (P+I): $1,386.Cash Flow Breakdown (if both units are rented at $2,049/month):Gross Rent: $4,098/month.Vacancy (10%): $410/month.Operating Expenses (37.3%): $1,376/month.Net Cash Flow: $943/month.Key QuestionsWould you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?

Montgomery Metropolitan Housing has a reputation of being difficult to work with and are slow to pay at times r so I have heard.One thing to keep in mind is that even with section 8, you still get to set your criteria that tenants need to qualify for your unit. 

Additionally, it provides investors with the opportunity to add a unit on a property they already own, simplifying management since the new unit is in the same location.Finding a vacant lot is both expensive and difficult, so the ability to build, subdivide, and create new development opportunities can make financing easier.

Until that started getting difficult.

I ran the numbers and looks like a good deal (7% cap rate, 5% ROI, and ROI will improve as the years go by).