simply look were you live in Milwaukee.. and look at all those great 30's and 40s houses on the north side of town you can buy for under 100k but it would cost 400k to rebuild them.. in those areas building new just wont happen until things change demographically and if it does not pencil for you doubt you can sell it to any one else.. so the smaller project maybe what you do.. then at some point in the future where economics catch's up.. you demo the small improvements and go vertical.

HUD is currently contacting State and local officials to explore streamlining the Department's CDBG and HOME programs in order to expedite the repair and replacement of damaged housing; and, Offering Section 108 loan guarantee assistance – HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.

From an economics standpoint, it is not the wisest way to solve a problem and I say this from personal experience, coming from a country that took that approach to the extreme - the more government restrictions you have the more problems starts coming out from other ends, you start having shortages, then you have to control pricing from significant increases, and so on and so forth and you end up with so many restrictions you might as well just not do anything at all.  

That being said, don't discount opportunities outside your comfort area if you can get comfortable with it and the economics are compelling. 

While the property may not still return 20% cash on cash, it would not be losing money on a monthly cash flow basis (hopefully..)But I think that is lazy and irresponsible, especially if you own anything more than a property or two.So I generally try to run what if scenarios on each property and then subsequently run what ifs on my larger portfolio to make sure that the portfolio can weather any economic storm that may come through.I have only been in RE for a few years and didn't gain the experience from 2008 so my question to the group is what scenarios do you test or have you encountered? 

This city is setting up a strong foundation for some good long term economic growth. 

Lenders that sell their loans today are also taking part in what they call CMBS 2.0 (post 2007 underwriting criteria, where it is very common to see certain terms and conditions implemented for the additional security of the bondholders, and the increased risk of the Borrower (you)).The one thing that I see over and over – even with some of the biggest players in the market, is this: Investors spend a lot of time and attention on the due diligence of the property, economics affecting property performance, property management, repositioning, and on closing the loan - - and NOT AS MUCH ATTENTION IS USED TO PREPARE FOR THIS ENTRY INTO THE FINANCIAL MARKETS, (WHERE THEY WILL BE RESIDING FOR UP TO TEN YEARS) AND HOW IT CAN ADVERSELY AFFECT THEIR RETURNS.

I've made millions doing it my way over a very long period of time through all the economic crisis in the last 20 years.Much appreciate your thoughts.

Thats basicly it. 2)Pro, can raise lots of money and buy bigger, more economical properties.

USAA gives examples -- "pay off transition expenses, consolidate high-interest credit card debt or buy a reliable, economical car."