While algorithms can analyze data at scale, real estate isn’t just about numbers—it’s about nuances and the most important component of real estate is understanding its value, and that to me (maybe I am old school) but can only be done by physically visiting and walking the property.So for me, factors like local market conditions, property inspections, and borrower credibility can’t be fully captured in a formula.

Whether these factors outweigh the challenges is a personal decision. 

* What are some factors to consider when identifying these hot spots?

Some assets can be valued significantly lower than their actual worth because of illiquidity and other factors.

This will help you understand the qualifying requirements, key factors to consider when purchasing, and how to assess whether a property might be a good investment at first glance.

Also, the rate the fed is always adjusting isn't the mortgage rate only something that influences it.

I actually read one of your posts on this topic years ago, which influenced me to carefully choose the right market.  

There is the inconvenience factor but it might be cheaper for you and your friends as well.

But that is calculated after expenses and depreciation is factored in. 

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).