The shorter the prepayment penalty period, the more it has an impact on the rate.

We see so many prospects who have been told by Youtube or mastermind gurus that multiple LLCs in three different states is beneficial when in reality the costs of upkeep hit the bottom line harder than any benefit.

I've already had to turn multiple people away after running their credit reports, so I can already see that it's not going to be financially feasible for me to be covering the fees myself.

@Jeff Hines - go with a direct lender and spread that $150K over multiple properties. 

Strategic Purchase: Acquired a discounted double lot below market value with a $17k impact fee credit.Custom Design: Built a 6-bed, 5-bath home tailored for co-living or multi-gen use, maximizing tenant appeal.Efficient Management: Managed construction, and self-managed operations to minimize costs.Premium Marketing: Furnished the property and used multiple platforms to attract quality tenants quickly, achieving full occupancy.What was the outcome?

The IRR will be around 19-20% with a 3X equity multiple and 14% CoC.

Real estate's "gross rent multiplier" is Wall Street's "sales to revenue",  "cap rate" is roughly "P/E ratio".When evaluating markets and investments I tend to start with GRM (or lazily the 1% rule), then attempt to return a cap rate based on assumptions about costs, then I work my way to multiple years of projections (assumptions about inflation, amortization, tax benefits, etc), and if I am partnering with one of my smart friends I have to pull up an IRR (internal rate of return).I also look at regional employment levels, median income to rent ratio in the zip code etc. 

•If you can, raise rents or find ways to increase the property’s income before applying again.Have you already tried talking to multiple banks, or is this feedback from just one?

That said, not all markets are the same—some are seeing rents slow, which could impact prices more.

@Saul Clavijo make sure you understand you will be getting into Class C properties at those numbers.Food for though below, DM us to chat more about Detroit:--------------------------------------------------------------------------------------------------------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?