Is it based on town zoning?

First, all properties that appreciate the appreciation is based on the property value, not the equity. 

Is it based on town zoning? 

You must exclude the land value, typically allocated based on property tax assessments or an appraisal, as land is non-depreciable.

The overall LTV (including all 3 mortgages) will be key and your selling point will need to be that the 2nd mortgage ($8k) will burn off in 2.5 years (based on your surprise that it was even out there, I'd recommend that you follow up in 2.5 years and ensure that it's been satisified, so that it doesn't surprise you again in the future).Does the $8k grant vest over the 5 years? 

Also, what's the nature of your business? 

The section 8 rents are based on number of bedrooms.

View report*This link comes directly from our calculators, based on information input by the member who posted.Hello All, Please help me analyze this BRRRR deal and figuring out what's missing here.What are the holding costs based on?

We also allow removal of a tenant from a lease as long as the tenant group is in good standing, and the remaining tenants qualify again based on their combined income. 

When I run the numbers based on these rents, the property operates at a negative cash flow.If I increase the studio's rent to $1,400 per month, the property becomes cash-flow positive.