When you go to sell the property, if you produce a certificate of inspection for the wrong number of units, buyer unless you are giving them a great deal and they will throw caution into the wind, would insist on the correct designations.

As such, just upkeep and maintenance of the yard became a factor in deciding to sell.

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

As others have said, the location is a big factor in MTRs, but so is the clientele you are going after.

The high HOA fee is already a factor, so ensure you’re comfortable with the overall carrying costs.Focus on the Land Value: Since the lot has development potential, you’re looking at this as a long-term investment.

For the 700 credit score you could take 1 month's rent as a deposit but for the other 2 you could take 2 months (as an example) due to the risk factor. 

Typically, we see anywhere from $600 to over $1000 per unit (maintenance and turn costs)  depending on these factors. 

There’s also a scorecard that gets released based upon many factors.  

All of these factors make the city a great place for BRRRR investing - so good that I started investing here remotely from Texas.

See, when building a portfolio, appreciation is key, and the #1 factor that will dictate things.