that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

They are lower than what I’ve been setting and getting. 

Shortly after the crash my tenants learned that condo developers were renting out luxury apartments in the area for around the same rents I was charging so I was forced to lower rents. 1200/apt 2 1050/apt3. 

While I could have gone lower I am lowering my risk tolerance because I expect a recession in late 2019 to 2020.

@Keetaek Hong I have a lot of clients who are facing the same challenges but they understand the long game and that it's imperative to build a portfolio, With that lowered interest rate I mentioned you are looking at 30% down and including PM fees will typically have you around break even or barely positively cash flowing.

You could also get a line of credit for about $150k (you should be able to borrow 75% of the value.)The reason I suggest this is…1) you save $40-$60k in selling costs. 2) you have a lower blended interest rate (2/3rds at 3.25% and 1/3rd at 7 or 8% instead of the whole $500k at 7 or 8%) saving you another $1k/mo in interest. 3) you only pay interest on that $150k when you actually use it, not from day 1  Unless you hate this property, or want to buy something you can’t afford without selling, that would be my plan.

You can use the "bad roof" or other problem to negotiate a lower purchase price. 

The rates will be lower and will allow you to maximize profits.

This can then be used as a negotiation chip in order to lower the price of the property.

The numbers may be 30-40% lower than today's cost, but the process/approach to estimating may be good for you to review.