Have you considered specific local market conditions?

Look at recently sold properties in the same neighborhood that match the size, condition, and style your property will have post-rehab.

As inflation drives rent growth, properties in stable markets like the Midwest can continue to deliver returns even in higher-rate environments.Market Conditions Favor Real Estate RecoveryThe commercial real estate (CRE) market has faced significant challenges in recent years, but signs point to a recovery:Bottom of the Market Cycle: CRE appears to have reached its low point in late 2024, with 2025 marking the start of a slow recovery phase.Limited New Supply: High interest rates have curtailed new construction, which should drive rent growth in the coming years.Policy Changes on the Horizon: There is growing discussion about potential policy shifts under the new administration, including a return of 100% bonus depreciation and lower interest rates.

I was looking at nyc buildings website for basement dwelling.I saw the conditions but were confused by 3rd and last bullet (see below).

Overcrowding can strain plumbing, electrical systems, and air conditioning, leading to expensive maintenance issues.

It is also great to change small but specific terms and conditions due to it not being just one tenant anymore.

It is in good condition, but has a lot of deferred maintenance. 

Daniel,If its something you really like from all accounts, get with an inspector and property manager to give their thoughts on the area, condition of the property etc...

I looked at somewhere between 150 and 200 deals before getting my first deal and that was at a time when market conditions weren't as tough as they are now. 

Due to the market conditions I wanted to have a good amount of equity in the building so I only refi'd 50% of the purchase.