Obviously you want to lower expenses while maximizing revenue. 

The price points do make it hard to cash flow even with the lower interest rate subject tos. 

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

Hi @Elias Halvorson,Both markets offer lower costs of entry and opportunities for cash flow.

If you're using a DSCR loan to purchase the home, most lenders use the lower of the lease agreement or 100% of the market rent from the appraisal form 1007 to determine the DSCR.

Risk entails everything from lawsuits to lack of diversity in investments to low rates of return to high exposure to vacancy (more units theoretically lowers vacancy exposure).

There are significant advantages to investing here (lower barrier to entry, much better price to rent ratio's, etc. etc.).

Cheap houses in lower class neighborhoods will get you cash flow with a lot of headache.

It would be a good idea to assess your tolerance to risk and then plan something like that, but using a heloc is going to be around 9-11% in this market so to pay something off with lower interest rate to borrow more might not make much sense.

Sales Tax Breaks: Construction materials and services may be subject to lower tribal sales taxes—or exempt altogether.4.