WE need affordable housing with all the mandates but the cities counties are forever changing the rules and not making it easier or cheaper every change requires something more  more expenditures of capital to get to the same place.. affordable housing biggest Oxymoron in all of Real Estate..

As a landlord, I do have to set aside a quite substantial reserve amount for capital expenditures, and it would be great if there is a way to have those funds counted as a deductible expense. 

Class A provides investors with more security by knowing that they are investing in top tier properties, with little or no outstanding issues requiring further capital expenditures.

This breaks up my rents and expenditures for me.

Not the purchase price.As an underwriter, typically you would model a potential acquisition using LTV on stabilized assets or properties that do not require significant improvements.This is because capital expenditure costs will typically not be financed by the lender.

@Trisha KirbyYou will go from 1 property to essentially 3 so your cost of maintenance, capital expenditures etc is not includedAlso you will never have 100% occupancy at all times so that needs to be taken into considerationI would also have a property managerLast but not least you did not include your closing costs etc.

A taxpayer must own a “qualified rehabilitated building” for which they have incurred “qualified rehabilitation expenditures”.

So forget about thinking of it as a "return"; instead, think of it as a hedge against expenditures.

This perspective is quite common in the MF sector, especially where sales comparisons are largely based on the asset's condition and financial performance (NOI which leads to a cap rate).When comparing two properties with similar capital expenditure needs, the industry standard is to evaluate them based on a cap rate.

You're not calculating any sort of expenses in running this rental such as vacancy, repairs, or capital expenditures.