I approached it very similarly to what you did. 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

However, they approach financial health from different angles.The 50% Rule is a quick estimate that suggests operating expenses (excluding mortgage principal and interest) will roughly equal 50% of the property's gross income.The DSCR is a more precise calculation (Net Operating Income / Total Debt Service) that determines if a property generates enough income to cover its debt obligations.Deal example:- Class C middle class neighborhood- 4bd / 2ba single family house- ARV: 190k- Purchase: 105k- Rehab: 35k- Market rent: $1,400-1,525- Section 8: $1,475- Property manager: 10%- Taxes: 125 month- Insurance $1250 yr- HOA: $55 month- purchased and rehabbed with all cash.

So now, instead of feeling excited about a new investment, I was scrambling for cash, stressed beyond belief, and facing major repair costs with less rental income to offset them.That experience completely changed how I approach real estate.

Through my experience, I’ve cultivated a conservative approach that balances opportunity with risk management that I apply to every deal that crosses my desk.

I’m especially interested in the "why" behind your approach.

Would you take a different approach?

Is there a smarter way to approach this?

Also, don't bid until they are approaching your max.

If you find a seller willing to carry a note, you might be able to negotiate an arrangement that works without needing traditional bank financing.Another approach would be to partner with someone who has capital but lacks construction expertise.