What does matter is they were initially trying to limit the increase for the unit, regardless if the tenant transitioned in that 12 month period.

Most of your due diligence (MEP & Arch study) falls under a feasibility period.

@Peter KimIf you plan to hold it for a short period, then interest rate isin't as important.However, the deal is basically break even to you and the bank at 5 years.$1398(mortgage payment with the 3.25% mortgage) - $1,327(mortgage at the 2.75 rate) x 12 months x 5 years = $4,260

Show them the pictures and or videos that were taking during the pre-rental period inspection.

@Dick Rosen periodic rent increases is something I haven’t thought about yet.

The rents will remain high after building but you can sell the new home and lot if you wish after a period of time I think.

Jennifer You have $170k appreciation in 2 years or $6.8k/month over your hold period.  

I frequently see 4-plex's that have original kitchens from the 70's and 80's, have neglected maintenance over long periods of time, or even have leases that are several years old without any increases in rental rates.

My wife has went back to school for a new degree so we are in a chill period.

When you are evaluating appreciation, ignore the COVID period.