You’d probably end up with a bigger after tax gain if you sold the 2nd property for any amount of money and did that.

Purchase price: $2,800,000 Cash invested: $560,000 The property is a three-story multi-family residential building with six independent units, initially facing significant challenges due to poor conditions.Renovation Investment Summary:- **Structural Repairs:** $250,000- **Kitchen Modernization:** $100,000- **Bathroom Updates:** $50,000- **Exterior Improvements:** $100,000- **Holding Costs:** $50,000- **Property Taxes:** $30,000- **Insurance Costs:** $10,000- **Management Services:** $10,000

Of course, what they paid isn’t going to take into account the money they have spent on renovations or remodeling, which can be substantial.  

Quote from @Matt Cook: I would really get with a realtor that is in the area of that property and that sells a lot of homes to comp the property on what it can sell for after the remodel.

I have recently just purchased my 4th investment property all in my name and have accumulated a DTI of 45.9%.

Unfortunately, it cannot be used for a 2-4 family property, only single family properties. 

@Rae Chris Ann Arbor is pretty expensive, so difficult to find cashflowing rentals.You may want to look in Ypsilanti - if you want to stay in your area.Otherwise, Metro Detroit offers a LOT of options.Read our copy & paste below for some helpful info:---------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Hi Jonathan,Congrats on your first big renovation deal—it’s an exciting challenge!

To continue with the 8-unit example, you again end up spending many multiples of these costs to build a comparable portfolio of single family properties.Another disadvantage of single family properties is that there is only one tenant per building and if they stop paying or if there is a vacancy, the entire cost of that property is on you and your wallet until you can fill that vacancy and get the rent coming in again.

Virtually everyone lives somewhere especially true for those that pay taxes (in CA property and income tax).