New supply and rising expenses are probably even more impactful.Florida has some of the most new construction going on in the country, and is seeing rapid increases in insurance costs.

On the other hand, if you find a supply vs demand imbalance in a cheaper market, prices and rents can rise unhindered. 

Simple economics, supply and demand. 

I recently had an estimate of $20,000 to create a basement egress window and I put my foot down and told my GC that I was going to rent the excavator, and we found much cheaper supplies, and were doing the project ourselves.

I know that I can write my travel, supplies, and food expenses off of my taxes while on that trip.

What about repairs, supplies, and other expenses?

In others experience is this return worth the risk given Multi-family environment ie supply, interest rates, project specific risks, illiquidity risk, and more specifically the Preferred Equity subordinated tranche risk (this sounds like just a Mezzanine loan without recourse).

I am curious about any potential barriers to look out for- timing, access/cost supplies, labor force?

@James Hamling thoughts on supply vs. demand and rate lock-in? 

Your returns in investing ultimately come from exchanging terminally abundant goods (fiat dollars, debt/future fiat dollars) for terminally scarce goods (high quality, supply constrained real estate).Selling to go into cash isn’t of interest unless I have a short term need for that cash or am funding another purchase.