That’s the second-straight month of index improvement, and it’s been driven by — you guessed it — lower mortgage rates over the past 4 months.

It is simpler and lower cost.

I'm imagining a lot of competition at the higher end valued properties and almost none on the lower end.  

For instance, if lower-end housing is purchased in Texas with an ARV of $70,000 to $90,000, you may be able to negotiate a deeper discount—say, 65%.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

Do you just go for the HUD amount or do you price it lower?

Expenses (both transactionally as well as operationally)  disproportionately impact lower priced assets.

The former provides a much lower return on equity but is simpler and easy to achieve over the long run.The latter is much more time consuming and risky, but provides high returns and a lot of tax advantages. 

As an example section 1250 gain is taxed like ordinary income, in contrast generic capital gains has a much lower rate.