The key is to compare each scenario side by side.

A property doesnt increase in value just because an STR is run successfully on it. its value on paper is based on the comparables in the area.

Other than that, it is really a light doc loan with not many strings attached compared to a conventional mortgage.

For my screening criteria - income from all financially responsible applicants is combined and compared to rent.

Property Valuation:Investors look at a variety of factors to determine a property’s value, including comparable sales (comps), rental income potential, and location.

  $6.25k feels manageable, so I compared the rent vs purchase numbers.  

I would compare my return with any market, anywhere but 1) this is a different San Diego market than the one I have been so successful in 2) while I am a big fan of leverage, I am not a fan of over leverage.

Here are a few things that I like about the neighborhoods in Indy compared to other states: high rent-to-home-value ratio, consistent and gradual city development, relatively low property tax and insurance cost, affordable renovation service cost.

Multifamily properties do require more management overall and typically appeal to a smaller, investor-focused buyer pool.At my stage, I prefer small MFH over anything else because of the stronger cash flow, scalability, and the more forgiving capex compared to larger MFH, but the best option depends on your goals and strategy. 

Leverage magnifies return. 3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR.