Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

@Joshua Lanzieri when renovating older properties there are almost always negative surprises.Go watch any HGTV renovation show and most of them will have this as a cliff-hanger, forcing the choice of either going over budget or cutting back elsewhere.10% overruns happen often, but 50% is NOT acceptable!

Just responding to your negative comment.  

Why would I be cash flow negative and losing money for years and years?"

With 5% down payments and all the expenses deducted, there seem to have close negative/only around $100 cash flow each month.

Additionally, they have another property which has appreciated in value, carries low interest rates, but has negative cashflow and essentially feels like it just locks money away.

What some people on BP don't seem to understand is to stop making the assumption that everyone is not working their best at thisif you have to provide negative comments or any sort of negativity when providing advice, then advice or recommendations shouldn't be your fortéAs i mentioned before.

Mostly people with minimal RE experience are adding a single ADU and they often make that choice based on cash flow without taking into account the negative equity position.  

It is increasingly more difficult to pay of even one mortgage when you are cashflow negative, let alone multiple.

, misc.You are in different reality if you believe you are not negative on that property