Next, I tend to recommend that clients stay away from inflated HOA fees.

Most properties today will probably cost twice as much as 5 years ago due to inflation. 

I would have to agree with this - appraisals are no exemption to the general inflation/rising costs of the past few year s- $750 is hardly outrageous and investing in non-warrantable condos and with HOA restrictions is always going to have a risk for hiccups

Many of those properties don't actually produce income due to turnovers, vacancy, maintenance and damages and you're lucky if they appreciate enough to keep up with inflation.

If properties in that area tend to appreciate more slowly, especially if you can't start renovations immediately, you may sit on that investment watching potential profits get eaten away at slowly as inflation passes appreciation. 

I really don’t know how to move forward.I do not see how this works$3800 (rent) - ~$1600 (p&i) -$340 (taxes) - $250 (insurance) - ~$1200 (maintenace/cap ex) - $380 (PM)  - $180 (vacancy) - $400 (water) ~$50 (misc) = -$600/monthin a market that appreciation and rent growth has not historically kept up with inflation.  

We're also able to evaluate our rates, and keep pace with inflation, on a monthly and quarterly basis because of shorter term leases.

The real property investment can be repositioned if it proves disappointing in its original form; it can be refinanced or recapitalized if it has too much or too e pensive debt; inflation over time bales out many bad purchases, and finally the investors knowledge, experience and abilities can be leveraged to turn around a cash flow negative property.I’ll provide an exampleThree years ago we purchased a note from a bank secured by two auto repair facilities with a large amount of excess land.  

This implies your return numbers are inflated.  

Inflation itself in the midwest territories will rise over time at a conservative 3% regardless.