Some areas still offer strong appreciation potential along with steady cash flow, and when working with trusted lenders, you can find competitive rates in places like Memphis, Little Rock, and Oklahoma City, which tend to perform well on both fronts.

While they mostly aren't lying, they leave out a lot of reality.Why would a government funded program like S8 pay MORE than market rents?

Anyone know the names of the funds that Lee claims to manage?

Of course, you can always contact a prospective fund operator directly and ask them your own set of DD questions (ask for their track record, properties that the fund has acquired thus far, performance of the fund, past funds that have closed to investors and how they have performed, etc).  

Do a bit of digging, and you can find single-families in suburbs like Decatur or Meridianville that appreciate at rates above the statewide and nationwide average and hit the 1% rule at the same time.One caveat, though, is that most rentals in Huntsville proper probably aren’t going to deliver the cash flow you’re looking for.

It was off market, I paid a local bird dog $20k for helping to get it to the close and even including that $20k at market rate it met the 1% rule.Today my underwriting would not have a 1% ratio with 80% LTV as positive cash flow in class C.  

I think most investors want to win on more than just the interest rate.

However, some investors don't mind this strategy if they prefer not to put a lot of liquid in up front and plan to refi out within a few years of closing (which seems to be a great option with the talks of the FED reducing interest rates this year).It really comes down to investing in a growing market, in a good neighborhood & building a great team to support you.

Here's a bit more in detail about how rates are calculated for DSCR loans:1.

Did you acquire the funds?