This is because the low rents will not cover Capital Expenditures over the long term.As an example... during Hurricane Katrina many residents were forced from the lower 9th Ward of New Orleans. 

Or on ancient indian burial grounds.

[Please note that my numbers include * Property value minus net cash expenditures and sales costs + initially paid closing costs] In worst case scenario of 1% appreciation every year, the 5th year shows profit of 20K*It’s important to consider all perspectives and considering it’s an area on the high, I’m hoping for the best and appreciate all your experienced opinions :)Cheers !

CapEx is "capital expenditure", these are long term costs you'll incur and depreciate (write off) over time.  

Until you have made it minimize your expenditures to things that are a must have.  

You should prepare for some capital expenditures to update utilities that are provided by the park.  

Profit and Loss by Class lists my revenues and expenses but of course does NOT include principal payments and capital expenditures.

. = Deal # __________ Good Deal/ Bad Deal Location: __________ 333- Message Me Property Type: __________Price: __________Acquisition: __________Loan: __________Down Payment: (20%) - __________Closing Cost – (3%) – __________Due At Closing: __________Rehab Estimate: __________After Repair Value: __________Equity: __________Income:Rent: __________Washer/ Dryer: __________Parking: __________Storage: __________Monthly Gross: __________Expenses:Mortgage: __________Gas: __________PMI: __________Garbage: $20 {Times The Number Of Units}Electricity: __________Water & Sewer:$75 {Times The Number Of Units}Taxes: __________ /12 = __________Insurance {$100} /12 = $8.34Monthly Expenses: __________Expenses:Vacancy {5-10%}- __________Repairs and Maintenance {10%} - __________Cap Ex - {Capital Expenditures} {8%} - ________Management {10%} - __________Operating Expenses: __________ {Optional} Future Assumptions: Annual Income Growth: {2%} Annual PV Growth: {2%} Annual Expenses Growth: {2%} Sales Expenses: {9%} Totals: Monthly Income: __________ Monthly Expenses: __________ Monthly Cash Flow: _________ Annual Cash Flow: __________ Total Cash Needed: __________ Cash On Cash Return: _____Monthly Cash Flow Total Including Operating Savings: __________Year Total Including Operating Savings: __________

A general rule of thumb we discuss around here is that on average, across a large number of properties and long periods of time, the total expenditures a property will consume (expenses, vacancy/rent-loss, capex, etc) is about 50% of gross rents.

Here is a good article describing the breakdown of Capex and how much to estimate for it (https://www.biggerpockets.com/renewsblog/2015/10/13/real-estate-capex-estimate-capital-expenditures/).