Augusta indeed offers great potential with a strong rental market driven by factors such as population growth and a stable job market.

Considering doing a 75% cash out refinance > 30yr 7.45% interest rateIn what situations might the 50% Rule provide a misleading picture of a property's financial health, and when would relying solely on the DSCR potentially overlook important factors? 

The structure will depend on the down payment, quality of borrower, terms of note, your cash out of the note sale needs, and other factors. 

Here are a few to watch out for:Property Condition: Most distressed properties need extensive repairs or renovations, which add to your initial investment.Competitive Market: With Phoenix's popularity among investors, competition for the best deals can be intense.Complex Deals: Foreclosures, auctions, or short sales are much more complicated compared to regular real estate transactions and usually require specialized knowledge.Tips to Successfully Navigate the MarketDo Your Research: Understand the local market conditions, including neighborhood trends, property values, and potential rental income.Build a Strong Network: Work with professionals who specialize in distressed properties-such as brokers, contractors, and legal experts-to make the best decisions.Assess Costs Carefully: Factor in the cost of repairs, holding costs, and any potential financing issues when evaluating a property’s profitability.Be Patient: Finding the right distressed property takes time.

Also, what would you consider the most important factor when choosing a company?

All of those are factors with conventional financing, but debt service loans do not. 

That is just not realistic in this current market.So in my opinion it's important to expose yourself to a large number of deals, so you can develop an intuitive sense of what's reasonable and what's not (and quickly discard the ones that aren't).And it's true that there is no way to 100% protect from fraud (and not just in passive real estate investments but even in public stocks etc.).

@Robert Quiroz I think all of the factors you have listed might contribute.So I’m not going to comment on that but I am going to comment on an assumption you made.If 85% of rents are below market on deals you underwrite then those contract rents are probably THE market rent.You can’t just go based upon area median income to rent ratio.First off urban areas are oftentimes street by street, block by block.

Ignore the $1,250 per month because that's your cost of housing, if you didn't pay that on the home you'd have paid that in rent so that's a non factor. 

When evaluating markets for rental properties, there are a lot of factors to consider: population growth, employment rates, rent to price ratio/GRM/Cap Rate, rent trends, vacancy rates, etc.