If you are very conservative purchase a fixer upper so you can force equity and hopefully have a low enough payment so that you can LTR the property or even sell for profit should the STR avenue not work. 

This increased demand is in areas that all ready have limited supply.Since the rates started to rise, my appreciation forecast has been conservative (as I have indicated in numerous posts) for my San Diego market (I have been underwriting at zero appreciation near term) and fortunately for me the market out performed my forecast.  

We can say with confidence that those buyers will not consider the financials rosy, but conservative.

Commercial properties can be lucrative, but the financing/underwriting required from lenders is generally more "conservative" relative to residential and usually have higher interest rates (unless you have a "rock star", long-term commercial tenant in place) and generally require more equity from the borrower compared to residential.

So if the LP's have enough cash they simply pay the loan off and own it free and clear.. but the size of the deals are so large raising cash to pay off debt simply is not realistic at all so if the property goes into default your junior position investors find themselves wiped out.Further more thats why a debt fund like Chris has can be a good choice for the very conservative investor..

I even kept the cash flow number conservative and the math still works, $1K/month on a $400K property is good but not a home run by any means. 

Just be extra conservative with your ARV estimates and have a great team of contractors to keep rehab costs in check.

I would be as conservative as possible in judging for cash flow. $38,000 would be amazing to get that, but of course, those are estimates and if it works out well. 

This should incentivize them to conserve energy.

He is a very conservative investor and gives excellent advice which helped me a lot.