For this reason, it would be prudent to not overleverage yourself in this type of environment in order to wait and see where rates do end up falling, as there is consensus in the market we are moving into a falling rate environment, the exact timing of when rates will be falling is unknown and different scenario analysis should be added to underwriting refinance periods to be sure the project is sustainable if inflation resurges and a refinance is delayed.

Hi Meghan,   My wife and I live in Coon Rapids, but have 2 rental houses in Duluth that we rent to college students.

One area can show great signs but literally cross the railroad tracks and it’s a different world.Be aware of these types of physical delineation.If you are getting no demand from qualified applicants then I would say it’s not in a margin of a gentrifying neighborhood.  

This would mean that the difference between the cash on cash return and the IRR is appreciation, which you'd receive upon sale. 

If you kept the property, and accumulated the CF/yr, it would take you 25 years to get that same equity that's sitting, frozen in your property.Also, if you cashed out and used that same equity as a DP on different RE, at 20% DP, that equity would buy you $2M in PV, not just $700k,...and, I'd be willing to bet, you could find new RE that would have a yearly CF well over $20k/year.On top of that (remembering my initial statement above), any appreciation applied would be applied to $2M, not just $700k. 

Basically, the further you get away from the city the more potential for cashflow, but you're also dealing with a different tenant base that may be tougher to manage.

It would be a rare new RE investor that could hope to have taken on this project without partners with experience.My point is investors in different stages of life and experience have different criteria for their RE investments.  

Structurally, it’s different.

Quote from @Jonathan Soto: great write up. thank you for taking your time and going in to detail. i have been looking into a business for myself but havent seen much in biz bysell that make sense. just need to keep searching Try looking into Crexi and Loopnet too, I find all different kinds of small businesses for sale on those websites compared to Bizbuysell.

., with the rapid rise of STRs, you will find that many insurers offer STR policies.We use Proper but it is very expensive but very comprehensive.