Items such as this that could be easily replaced by almost any LL at a very minimal cost, will turn into a $135 aggravation at best if you overlook it!

I have had investors pull equity from their homes in the phoenix area to buy cash flowing properties in Fayetteville and similar areas, because the price growth in the phoenix area generates amazing returns.It depends on if you want cashflow now or delayed gratification later.Keep in mind that when you do sell, there are costs to selling and depreciation recapture  and IRS taxes, which eat up most of your "equity" growth. 

@Karolina Powell I am seeing 6.75% with 1.5 points with putting 20% down. 25% down gets you down to 6.49% with similar cost. 

I think the right investor would do 2 units long term one unit short term. this strategy allows you the greatest flexibility. we are also developing an extended stay hotel that's 58 rooms. the size of the average room in that is 216 square feet and rents for a target $80 per night. our development cost per room is 100k per room with hard construction. the smaller you go the more money you make. if I was to suggest anything it would be to focus on the smaller part of the market and on multiple unit dwellings and finding and identifying markets that meet similar numbers. that will probably be midwest markets.

Things that would be helpful to know: how much are your holding costs? 

If less than two years, cost seg probably isn't a good route.

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, due to high property costs in our local market, we have been exploring opportunities in more affordable states, including Texas, Pennsylvania, Michigan, and Ohio.

Your thesis is basically rent low and accept less desirable tenants so I don't think that is the best thesis to base an investment off.

I am not familiar with any HML on a fix and flip that would not want an appraisal as well as an estimate of costs.