The market has softened considerably in NYC the last 6 months so who knows you might have sellers who are more willing to give concessions, but a year ago they would have told you to go fish if you weren't putting 40% down.

So will prices soften in the sector in many locations?

@Hans Rodvik I haven't really seen a huge softening of price yet.

Also, water softeners tend to speed up corrosion.You also have to worry about the plumbing connections leaking and corroding.

That can easily evaporate if costs run a little over (or you fail to account for some costs) or the market softens (or you overestimated the current ARV).

There is always a chance that you might lose money if your project runs over budget, the market softens, or you encounter some unknown issues?

If economy softens, class B holds up like a rock while class A will face headwinds of over supply at some point and reduced rates to keep folks in their buildings.  

Trying to stay focused on building even more cash to be an even stronger buyer when market prices soften more and primarily a buyer's market.  

For example, when the net worth on paper drops due to a softening in the equities markets, people feel like they aren't as well off as they were before.

You are definitely starting to see more and more move in specials and the like, a sure sign of a softening market.