Driving a car is legal, as long as you follow the rules.

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. 

@Sakib KhanRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Even though your market might prove expensive, I would exhaust all options before ruling it out.Truth is, you have a unique competitive advantage in your market.  

I have successfully defended multiple clients in this situation.Once again: Don is claiming his deduction correctly, and I am breaking the rules.

A good rule of thumb is to have at least $5 to $10K in reserves per unit to cover these situations and avoid financial strain.Thank you for the reply and help!

Here’s what CCC looks like when applied to large multifamily properties:Key Elements of CCC1.

My logic behind a area to hold is basically is in my zone of knowledge that means close in and in a  A-B area .BIG fish can have the whole USA in their  zone .Outside of my zone I am thinking flip it there are exceptions like all rules . 

Another note on construction cost, going vertical is very expensive now and would require have a great connect with a developer and a builder in the area.See what rents are in the area and run the numbers to ensure the rents will cover your costs and give you a solid return—using the 1% rule can help.

Keep in mind we are a "Mega PM", big staff big unit count, so it's a lot different then the Ma & Pa, but the principles can apply.