Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

It is a small town, definitely a tertiary market right now, but that is where opportunity is going to be found.I think LTR, in the right location, can provide enough revenue annually to cover all holding and leverage costs while the resident pays down the principle and the demand in the city sustains slow and steady appreciation. 

Quote from @Jared Haxton: Hi BP Community,I own a 2-bed/2-bath condo in Prescott, AZ (near Embry-Riddle Aeronautical University, hospitals, and medical facilities), and I’m exploring selling it via seller financing.

We just completed 6-unit one bed one bath apartment in midtown Sacramento, CA As we are considering doing MTR, your feedback on how to move forward with this plan is appreciated  

It can still qualify if it's a fixer-upper, as long as the rental income from the property can cover the debt service.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

This leaves room for profit and covers unexpected expenses after fixing the property.

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.

If the permanent financing will allow you to recover most of your initial investment and the fair market rent covers the principal, interest taxes, and insurance with cash left over, you have a BRRRR.