that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases: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.

Your cash flow is positive on paper, but how will that look in reality?

Depending on how close I was to having 20% equity in the property and being able to avoid PMI, I’d consider using some of my cash to pay down the mortgage when I refinanced.

Key Factors for a Good Seller-Financed DealCash Flow: Rental income should exceed monthly payments (PITI) by at least 1.25–1.5x.Purchase Price: Compare to ARV and market value for fair pricing and equity potential.Interest Rate: Aim for competitive rates; higher rates must still allow positive cash flow.Amortization/Balloon Terms: Favor longer amortization and align balloon payments with your exit strategy.Down Payment: Lower upfront costs reduce risk but should meet the seller's expectations.Flexibility: Seek no prepayment penalties and fair late-payment clauses.Property Condition: Ensure the property’s condition matches terms through inspections.Seller Motivation: Assess the seller’s willingness to negotiate favorable terms.Exit Strategy: Have a clear plan for refinancing or payoff at term end.Portfolio Fit: Ensure the deal aligns with your financial goals and risk tolerance.Vetting multiple deals and consulting professionals is crucial to making sound decisions.

Those hold about $250k worth of equity.

Inside your 20, 820 and 635 loop you'll likely have to put 40% or so in the deal in order to cash flow positively.

All of their products are Dutch-interest and their highest leverage option is a 1st position with a 2nd position loan wrapped with it to get to higher leverages.  

Quote from @Anne Christensen: Thanks Nathan,  We have over $1M in equity. 

And yes, that’s half the type.They miss the other half, which is not only active investing, but in many ways mirrors equity investing more than traditional debt investing.

It was the boost I needed to grow fast.To get started, I partnered with experienced equity raisers.