So, this makes it extreme inconvenient to ONLY be given a new loan AFTER the sale of the current property, and thus concluding the old debt.Typically home builders have programs to deal with this type of transition. 

I have a big chunk of cash saved that I need to put to use, but I'm having trouble determining the value of a new build vs a more traditional deal just buying a rental and rehabbing.I've been presented with an opportunity from a builder to build a new duplex in an area which can be used as short-term or long-term rentals in Knoxville, TN.The builder is a rare combination of fast, cheap, AND quality, and has written a "cost-not-to-exceed" clause into the building, so it's an extremely competitive build cost (details below).The deal would cash flow very nicely, but it would force me to leave a chunk of cash into the property.Here are the numbers:duplex: each unit 2:2, 900 sq ftTotal cost of land, 1.2 acres (This is already leveled, excavated, and prepped for building): $80kMaximum build cost: $252kTotal cost: $332kCash in: $67,000ARV: $350kApprox cash flow: $800-1,100So, again, how does this compare to a typical buy/rehab?

These factors help create a ceiling effect--where, no matter how much the house is worth, there's a limit on how much you can charge in rent.And, as you mentioned--if leverage is involved, the debt service of a more expensive property often overshadows how much you can charge in rent.These factors contribute to rent not increasing proportionately with the price of the house (and there are probably other factors too, that I'm just not thinking of at the moment...haven't had my coffee yet).Having said that, there are some extremely niche markets with rental properties that cater to multi millionaires, and which are extremely expensive (certain areas of LA, for instance...probably the French Riviera --where there are probably lots of transient tenants worth tens or hundreds of millions)...but, those types of markets are obviously the exception to the rule...Good luck out there!

@Otchi GalI have been extremely fortunate to have bought several properties from neighbors.

This is extremely predictable and public knowledge.

However, it had a similar effect on sellers, many of whom cannot stomach selling a home with an extremely low-rate mortgage just to buy another a 6-7% rate.According to the Wall Street Journal, “Almost 70% of households with mortgages have rates below 4%.”To drive it home, though, take a look at this chart of median single-family prices in Austin for 2022 (including December so far):The median single family home sold in November for around 20% less than the median home in May 2022, which appears likely to be the high water mark for some time to come.

Results:  Mortgage rates continue to rise, cost of goods and service EXTREMELY MORE, disposable income Significantly decreases.2.

In Columbus OH it's extremely tough to find deals that meet the 2% rule. 

That's extremely rare in my area - If I'm all in for 80-85% of the ARV I'm very happy with it. 

On the other hand, NOI and Cap Rate become extremely important because that determines value and to a large extent, the size of the loan you can get.The only point where this becomes a gray area is if you were to combine multiple contiguous properties and run them as an apartment.