So I would need a good interest rate and provide upgrades that would yield positive ARV along with pay down and appreciation to provide 20% equity for a refinance?

But that's in the nature of capex, you are upgrading your assets.

Hi Ayyoub Research is the key, Conduct thorough market research to understand why the competing property is listed at a lower rent, Consider any improvements or upgrades that could enhance the appeal of your property to potential tenants, If you're unable to match the lower rental rate of the competing property, consider other incentives to attract tenants, such as offering a shorter lease term, including utilities in the rent, or providing additional amenities.Hope it helps.

@Amy Healy The power of a 1031 exchange is that you are able to leverage your entire gains and upgrade to larger propery, newer property, or better located property.

Too many tenants will tell you a rental is perfect, then they move in and start demanding you upgrade appliances, paint the walls, replace the flooring, add a deck, etc.

Now there are some improvements (kitchen remodel, bathroom remodel, upgrading windows) where that flips on its head, but it's still something to really plan through. 

To evaluate investment prospects, including positive cash flow, potential for appreciation, and value-added upgrades, do a full property study.5.

If you want to stand out to our BiggerPockets community, please use code VENI324 to upgrade at 20% off!

Unless the rules have changed - and I don't think they have in the last year or so,  you can buy in the same market if its an upgrade, or 50 miles out.

The improvements upgrade their property and could benefit a future Tenant.