Mean while i would be building equity, and if rates do lower, or when the term ends, could refi for better rates and then maybe cash flow.My questions are:Is this too naively optimistic?

As far as purchase price - I find older homes you can get a much better price on and rehab and still be slightly under market value - and the rent will support the mortgage and expenses.

Their ability to recover their money should you default is much lower in this position.

Finally the pro formas that they provide are absurdly basic and neglect at least 25% expenses, so are essentially useless. 

For example, should we focus on acquiring one high-quality property in a strong market, or would it make more sense to spread the investment across multiple lower-cost units in emerging areas?

Further context, I have zero debt, high 700s credit score, one other investment property here locally. 175k in cash available, looking to do DSCR loans or cash and then refinance.Peoria, Illinois- Great need for lower income housing, market appears to have many options.Lawton, Oklahoma- Looking only at extremely cheap properties, as it seems it’s not terribly hard to find renters.

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.

@Carlos Ptriawan how do you mean, "management required the LTV to be lower than 50-60 percent" ?

overbuilt. just google Austin and over delivered or overbuilt and you'll find your answer. strong market, expensive land, expensive to build. 

They lower taxable income for federal taxes but not for FICA.However, employer contributions made by the S-Corp are not subject to FICA and count as a business expense.Make sure your W-2 correctly reports wages, deferrals, and FICA wages.