Hi Robert, I always look at the rehab and deciding what I can do vs the opportunity cost of spending my time elsewhere.

Mod Building if done right cuts your carrying cost and your installation time making it more affordable. 

Increasing NOI and value of property by 2M+ Lessons learned?

And over time, as those assets to make our product we sell had a fixed price, the dollar does not sit fixed, our cost of product increases meaning increased cash-flow.

Be conservative on your rehab budget, rehab timeline, holding costs, etc.

In general higher cost neighborhoods are safer than lower cost neighborhoods.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Quote from @Melanie Baldridge: In 2025 the bonus depreciation rate is 40%.This means that if you bought a property for $1M in 2025, did a cost seg study and found $300K in eligible assets that you could depreciate, you could take 40% of that $300K as bonus depreciation to offset your income in the first year.40% of $300K = $120K.You then apply that $120K to the owner’s personal tax rate to find the final amount that they can defer in year 1.If your tax rate is 37%, you can defer $66.6K.This is a big deal even at the 40% bonus depreciation rate this year.It’s a massive benefit 

Sometimes, unseen issues (like major repairs) end up costing more than the discount you negotiated.Final Thoughts•If there are no major rental restrictions, and the numbers work based on rental comps, this could be a great first investment.

It's tempting early on to leverage as much as you can so you can do more deals and keep liquidity, but increased cashflow especially with PMI will make you sleep a lot better at night.