You're absolutely right—rising material and labor costs have made it much harder to accurately project future reserve needs for condominiums.

One of the things many say is that you must intend to perform on a purchase agreement or it could be fraud which is BS.

.: Hello, I have been seeing increasing opportunities recently to bid on non performing notes on commercial properties that banks are trying to offload.These notes usually have the following characteristics:The note has reached maturity several months ago.

@Ginger Vaadi I would agree the 50% rule probably more accurate over time.

Periodic 1031 exchanges when appreciation stalls out, or performance goes down, or trapped equity is costing you return are all great strategic moves.

That market from what I can see on the few trips I made to perform due diligence is really robust and such a pretty area I can see the attraction for those working in Tech or govmit in DC. 

After reading this thread, a few comments come to mind over this common A or B decision.Without knowing how much it is (no need to say) makes my advice (or more accurately, my opinion) more general in nature but here it goes:Lending has very little to no tax shelters whereas buy and hold does.

Occupancy Rates: How can I accurately estimate average occupancy rates for these areas?

Books are important to maintain because it keeps track of the performance of the partnership not only for one year but over several years.Partners normally have the right to inspect the books.Will the accountant you work with either maintain the books for you or help you make sure its done correctly?

I agree with @Chris Seveney that a performing note would be a very good starting point.