City has recovered from bankruptcy in 2012.

So sustained maintenance should not be your concern, your concern should be on how fast you can recover the initial cost of the hot tub, the maintenance is not the issue.Argument #2 Seems like this is based out of fear and the unknown.  

For instance, while it can bolster initial cash flow by reducing tax liability, it could diminish deductions in subsequent years (when the property might produce better cashflow), impacting overall tax footprint, so you need to take into account all that in the context of your short term and long term tax strategy (e.g. if you plan on selling soon, at which time the depreciation gets recovered, or not and planning to hold for a long term/forever/1031, buying more later and creating more depreciation to offset cashflow or not, etc.).The alternative is a do-it-yourself (DIY) or survey option, which costs around $400 to $500 per property (I can do my CSS report in 10min, once I have all the data needed).

But if an when the cycle recovers, the valuation will be quite different in the end.The total return also includes income and this varies depending on the deal.

The more cash you put in, the more your cost goes up, and the more you have to recover before you make a profit. 

Thank you Rahul,Delayed financing requires two closings, but it gives you the bargaining leverage of cash purchases while recovering a bulk of your initial capital and providing funding for the rehab. 

Regarding Jonathan's point, it's crucial to evaluate the cost of these additions and calculate how long it will take to recover that investment.I'm a bit unclear about your living arrangements.

Most long-term sponsors know downturns happen periodically and that's why they run for 7-10 years plus (to give time to ride it out, valuations to recover and sell at a better point). 

Once my construction is complete, can i do an immediate cash out refinance on both properties to pay back the HML and recover my initial down payment?

I’m figuring the cost of the $35,000 process at the first building will only take 2.5 years to recover and the cost of the $45,000 at the second building will take about 2.2 years to recover once all the tenants are paying for their own heat.