@Ted BarrettIt's not really a rule but a napkin math theory to estimate if an investment is "good" from the twenty teens.

@Jake Andronico "it was not sexy".

Investors generally want annualized returns from a combination of cash flow and equity on sale of mid-to high teens; and if they perceive this as a risky investment, they may be seeking even higher returns.

I would say that Philalephia is general is not a "sexy MF market" like you hear about in the SunBelt or South and I think there is less inventory in general.

Con is of course this is the highest rate option, however with no prepayment penalty one can re-evaluate their options very soon down the road.The 70% LTV option: The interest rate is starting to look sexy, the downside is the 20 year amortization, that was in this case the tradeoff to get the leverage point and the rate. 

Sometimes a 6 or 7 pref isn't sexy but if it's a strong investment with limited variables to the cash flow stream then might be better than a pie in the sky investment where the odds of not turning out well are higher than doing good.

the homes were selling for 120 to 160k  at that time .. same homes sold for about 20 to 30% higher a decade before.. then as we know Detroit had one of the great crash's and just like your buddy at 3k a home many of these homes went down to the teens etc.. and have just been crawling back I dont believe the values have ever gotten back to their historic peak.. maybe one day.. but not today..

Other people may have issues with it for religious reasons, or have teens along who may get their hands on it before the adults even know it's there, etc. 

I got sexy with real estate, once.

My story isn't sexy but I connect more with locals like Jonathan Greene and others who slowly build our portfolio.