Compare this to selling the Market A property in year 3 which has appreciated 5% a year and is now worth $550,000.00.

This can easily happen when the person valuing the property does not account for differences in the subject property and those chosen as comparables.   

All the hard money lenders I've worked with in the past (and the one I currently work for) deem an appraisal necessary for risk management purposes to insure AIV and ARV estimates are good.Curious how you'd manage risk without one? 

Corvallis is notoriously “anti-building”, a more hyper-inflated market inside of its own bubble compared to the rest of the willamette valley.

How does it compare to traditional LTR from your perspective?

As others have noted the number of MF properties in the greater Phx area is low compared to many markets and the number for sale is even lower.

However, in such a case, a rescue fund would hold a superior position in the capital structure compared to the common equity investors, including yourselves and there acting as a parasite taking equity upside from all common equity investors.While this might provide a safer position for the pref equity slash rescue fund, it would also significantly impact the returns for common equity investors (previous guys).

But this is Rare.. you cant compare most low value areas of cities in the mid west or Rust belt to Charleston SC.. 

We just have to hope mortgage rates decline a little bit in 2025 while the supply does not drop so that we can have more home sales in 2025 compared to 2024.

A monthly net cash flow of $277 is positive and reasonable for the area, but you might want to compare it to similar duplexes to see if there are better returns available.