Given our higher insurance costs (usually 0.7% to 1.0% of purchase price as a rough guide -$291/mo on low end) and property taxes (typically between 0.5% and 0.7% of purchase price as a rough estimate -$208/mo on low end) that leaves only $1489 for Principle and Interest.

The easiest way to avoid it is to include all services in the rent and estimate use for each unit, based on square footage or number of bedrooms, bathrooms, etc.  

Get estimates from contractors for adding a separate entrance, a kitchen, and updating the bathroom. 

While I’ve never done a project like this before, it’s something I’d love to take on—or at least organize and bring in the right experts to see it through.I estimate it would require around a $2M investment to build 5 houses on the lot, with each home valued roughly at $600K.

@Ray HageI agree as I would stay away from condos as between special assessments and increase of fees, what is the risk vs reward.Many of these buildings are run by people who are not property managers or have development experience and lack the knowledge to properly run the propertyAlso many don’t realize that on older buildings your initial estimate will be 30-50% less once the work starts, especially on older concrete buildings that are susceptible to deterioration due to the weather in these areas (especially the salt)

I tend to be on the conservative end of estimations, as I'd rather plan for the worst so the deal can only be better.

I'm assuming you ran the numbers prior to making the purchase and over estimated the occupancy and rate per night, (along with costs).

DSCR Lenders will generally underwrite DSCR Ratio for a 30-year loan at a "go-forward" estimate of NOI thats generally looking at the next 12 months or first 12-months of the term. 

I'm estimating $120k-150k in renos.

Hi Lygia, you can definitely find comps and estimate MTR rental rates with Airbnb and Furnished Finder.