If it's a deal that is in a very very desirable location and has tons of built in equity and appreciation, I would be totally good with negative cash flow for Y1 and Y2.

@Kyle LipkoRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

This is located in the Sailboat Bend neighborhood of Downtown Fort Lauderdale.

Quote from @Michael Smythe: @Jerry NoguerasRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Consisting of 112 units located in a growing and stable area of Dallas.

@Felicia NituConsidering the land in an area like Sycamore Square can only be bought at a premium, the ROI is not really accurate.A property in a good location in the Sycamore Square will cost you upwards of 1.5 million.

Look for a location with low crime, then look for the neighborhoods with the best schools.

Why not sell it and try again at the new location?

If this property is hard to rent, or is functionally obsolescent (only 1 bathroom, no yard, etc), or has deferred maintenance that will be costly, or is in a location that is not appealing to Tenants, then maybe a sale would be a good option in favor of a property that has better Tenant appeal, which will likely increase rent and avoid long vacancies in between Tenants.An option to consider....

This is located in the rental real estate publication by the IRS.