They are mocking these up with interest only loans and factoring back in the tax deduction as if you qualified for the tax benefits of a real estate professional and factoring in the diminished first year property tax (since its not a full year).

The factors you mentioned are very important to keep in mind for any investment, but I like investing in areas I know. 

I’ve been in a similar position where I wanted to scale but equity was a limiting factor.

ARV is a very important factor here. 600 FICO is minimum. 

Quote from @Laura Yelin: Hello BP'sI like Sherman...I lived there for about 3 years many years ago and still sell and rent there.It's a slow wealth building market in my opinion, not get rich quick.Mostly blue collar stable town.

@Polat CaglayanI've never seen a formula but here is a general rule of thumb for multifamily:The class of an apartment refers to the quality of the building, which can be determined by a number of factors, including age, location, and condition: Class A: These are the highest quality apartments, typically built within the last 15 years.

Quote from @Lisa Albright: Hi All,Newbie here, just a quick question we are building an addition on our second home, we have a primary residence, and two rental properties.

For C to B-Larger developments announced nearby-Increased activity in new construction-Building of commercial retail in or near the neighborhood. 

@John Underwood what would you say was the key factor is making your LTR cashflow so much? 

You can build a deck around them as well - or not.