This is for a completely upgraded (a few years ago - granite counters, open concept, chef's kitchen, great entertaining space, new bathroom) 1 bed 1 bath in an excellent neighborhood. 

So one way to think about it is to apply the economic concept of sunk cost. 

Heard the concept of owning your first home for tax benefits and others.

I would have no problem going through the process again and starting from scratch to design and build a multiple unit concept, and engineer it, I just need to know that I will have the finances to back up the build. 

If you are not well versed in all of the above concepts - you probably should not be buying an eight unit building.   

We call that limit a financial finish line, and everything over that limit we use on others, either through nonprofits serving people all over the world or by helping people directly.While that concept isn't something we came up with ourselves (many others have done the same), it turns out that when you give away money to help others, it starts to get addicting.

Hi All - I've been kicking around this possible concept in my head for a while now and can't come up with an answer...maybe some outside-the-box thinker can figure something out.

I really liked the multi unit concept even though I had never seen anything like it before (or since) and it made sense on paper although it looked like a bad deal from the visuals.

I should add to my answer above because I failed to address one of the most important concepts:  Incentive.There is an insinuation here that recapitalizing at a below-market basis is inherently advantageous to the sponsor, and thus the sponsor has some incentive to “shortchange” the original investors.So how does one insure that this doesn’t happen?  

I would also like to know what do people think of this fairly new concept of "Rental Arbitrage".