A better method than using percentages in my opinion would be to total up everything you think the property will need to have replaced during your hold period for example 1 roof, 2 water heaters, 2 floors, 2 furnaces etc., 1 driveway, 1 porch, 20 windows... whatever Capex you anticipate doing while you own it, and total that up then divide the number by the number of months you plan to hold and use that as your Capex allocation instead of a percentage of rent.

- Even a commercial loan will require a personal guarantee, so they will look to your financials as well.Thanks,Tom

One of the biggest misconceptions is that S8 rent payment is guaranteed.

Students move out every year so you are guaranteed 30days of vacancy and if you have property management thats another half months rent for placing tenants so I'd go family all the way but students you probably can kick up the rent if its a prime location because you are charging by the room.

All you have is the promise to have clear title at the end of the period.

This means you can't reject Section 8, for example.One thing you can guarantee: the larger cities will always have a more liberal worldview and things will always change in the favor of the bad people.

Pros: "guaranteed' rent though this is subject to government funding (currently funded through HUD) but we did receive payments still during gov't shut downdeposited to bank accountstenants are generally better than cash tenants because their payouts demand it.See my con but because the process is difficult for tenants they are generally committed once they find a place and are settled. 

We typically employ a week-long trial period during which we'll give them a single project (e.g., making 10 seller calls, or posting 3 houses for sale on Craigslist).We make sure to provide detailed instructions and give them crystal-clarity on what successful completion looks like, and then we turn them loose.At the end of the week, we'll assess their performance.

Because real estate markets fluctuate there is never any guarantee of what a property may sell for at a future date.

If you are more interested in growth, and not interested in cash flow, equity multiple could be the focus, if you couple that with hold period timing.There's no absolute answer that covers everyone, but what IRR does is it takes into account the amount of cash flows, the direction of cash flows, and the timing of cash flows to quantify results that you can then compare to other similar options.