How did you add value to the deal?

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.

Good evening BP world,I am looking to make some contacts, specifically RE agents and hands-on investors in the phoenix area, in order to start acquiring some value add SFH investment properties.

I have a contract on a house in Phoenix AZ with a value of $500,000 and a mortgage of $288,000 to be taken subto.

On the surface, the deal seems appealing, but there's a catch: the asking price is $475,000, which is about 18% over the market value (based on comps and DealCheck estimates around $402,000).Details of the DealProperty: Duplex, 2,400 sq. ft., Purchase Price: $475,000 ($197.9/sq. ft.).Estimated Market Value: $402,000 ($168/sq. ft.).Financing Terms: 2% interest rate, with a 9-year balloon.Unit B Income: $2,049/month (Section 8 tenant through November 2025).Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.Monthly Loan Payment (P+I): $1,386.Cash Flow Breakdown (if both units are rented at $2,049/month):Gross Rent: $4,098/month.Vacancy (10%): $410/month.Operating Expenses (37.3%): $1,376/month.Net Cash Flow: $943/month.Key QuestionsWould you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?

Appraisal is where if the value of the property didn't meet the value of the loan, you can negotiate the price to lower it.

How did you add value to the deal?

We are chasing add value apartment complexes of 32 units or more, priced between 3.2M - 4.8M, purchasing all cash while using SOFR or Fannie as contingencies, targeting a 6-8% cap upon entry and want to operate sub 5% for stabilization.

There are plenty of websites that can give you a good idea of property values in your area.

I have a house where the information bubble (assessment, stats, value) is a house two blocks away, even shows a street view picture.