My criteria is cash on cash return.

Does having an LLC make it easier to distinguish on a tax return that this is a rental property. 

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.

I have gotten 2 this year so far on the market that pencil for us at roughly 50%+ return cash on cash after lending and holding costs

I agree that the full 25% deposits were high for new build rather than EMD.

The cap rate is not equal to the return for the investor (or the GP either).

DESTROYING COC return. 

@Merrick Hidalgo If your private REIT investment is returning only 10% of the principal and the remaining 90% is likely lost, the key factor in claiming a capital loss is when the loss is realized for tax purposes.

@Christian ArtusoSome mentors 'expect' things in return, which is how they want to operate. 

I have family in Houston, Dallas, and the Valley, I was networking with brokers in San Antonio, but the Taxes seem to be quite high as well in that State, although much favorable laws/regs on the landlord side.