Even when you do find a value add deal and you go to pull all your original cash out you're so happy but only to realize since you're in such a high priced market and low RV (rent to value) area that you'll now be negative cashflow so its a catch 22 in high priced areas.Barring you use creative strategies, operate a business like short term rental, rental by the room, halfway housing, transitional housing, B&B hotel like model, its tough to make the numbers work in high priced markets.I have helped investors in the 1-4 space coordinate the financials and how they have to display these figures to continually qualify for funds going forward.

@Veda B. that sounds a little high but not crazy. 

Just had one close wherein he departed a 4/2 for a 2/1 after breaking up with his fiance whom he had previously intended to make babies with.It's a matter of a) it being true and accurate (since the underwriter could ask you to document your claims in some way) and b) quality packaging and presentation on the loan originator's part. 

Probably he got mad because I called and yelled at him for not showing up to work for a week.)Contract exerpt "B.

This is going to be my first real estate investment and after running the numbers I have noticed that if I don’t (A) Raise the rent on the tenant that has been there for 7 years or (B) get the home for cheaper then they counter offered.

Some "cons" of the 203k are:MI (mortgage insurance) for the life of the loanUpfront MIP (mortgage insurance premium) can reduce the effect of the 3.5% down paymentCan take 15-30 days extra to closeNot all industry partners (Lender, Realtor, 203k Consultant, and Contractor) are as knowledgeable/experience as neededSlightly higher interest rate compared to FHA 203(b), which is the normal FHA loanCannot repair/add luxury itemsSome areas can have lower max loan limits that what is needed to do a 203kExcept for qualified non profit groups, required to be owner occupied for min 1 year  There are many pros to the 203k, but above are just some of the "cons." 

By focusing on class B/C properties we expect to see an increase in demand and in rental rates during any downturn Lock in long term financing – lack of available credit was the downfall of many homeowners and investors during the last recession.

@Karl B.

Let me know what you think. https://www.policygenius.com/b...

Looking for great cashflowing B class mutlifamilies with favorable returns priced 150-300k or higher (but I figure if higher then might as well get into apartments).