Apparently they checked out >700 unreturned tapes from the library, mattress, toys decayed. 

@Geraldo Coldros, all of those items decay and will need to be replaced eventually.This particular scenario has you replacing a lot upfront. 

You literally lifted this duplex from chaos and decay and not just made money for yourself, but improved the neighborhood and gave a grand old building another 50+ years of life.  

My question is:  Will inflation help counteract the affect of higher interest rates on MFR because rents will inevitably go up or are both factors a negative on the MFR market? 

I'm probably going to regret selling my rental home in SF 20 years from now, so to counteract the regret, I just need to redeploy the capital and try to beat a 5% compounded annual return for 20 years.

To me, nothing better communicates "we've given up on this place" than a kidney shaped patch of grass surrounded by decaying pool decking!

I've found decaying cats, possums, raccoons, rats and bats in properties I've bought and was just glad it was only a critter.

Let’s say a downturn happens, and investors are ready for it, won’t that counteract the effects of a downturn?

The 10-year-old house on the other hand may be getting to the point where the HWH needs to be replaced, the exterior needs paint, the fir (cheaper than cedar but not decay-resistant) trim boards are starting to show rot as the caulk cracks, the builder-grade windows are fogged and the skylights are leaking.

I think the expected gradual increases in interest rates will lead to a low/no gains scenario as things like higher wages/inflation counteract the affect of the increase in interest rates.