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.

For example, Personal Consumption Expenditures (PCE), a leading indicator of inflation preferred by the Fed, was up .7% YoY in December - exceeding estimates of 2.8%.

I'm a little skeptical of the amount the accountant told me it was given my expenditures and rental income over the years.

Minimal to no monthly expenditures outside of taxes.

Along with substantial property price increases we have seen exponential increases in insurance premiums, property taxes, repair costs, and capital expenditures.