Over the past few years, the costs of owning and operating real estate have climbed faster than many of us expected.  Stricter building codes, added environmental compliance, more expensive building materials and labo...

Here's what we use for our Metro Detroit market, which should be adapted to whatever market you're looking at.Key metrics for each Property Class:Class A Properties:Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.Tenant Default: 0-5% probability of eviction or early lease termination.Section 8: Class A rents are too high and won’t be approved.Vacancies: 5-10%, depending on market conditions.Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.Tenant Default: 5-10% probability of eviction or early lease termination.Vacancies: 10-15%, depending on market conditions.Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years.

These past 5 years i have been focusing on adaptive reuse multifamily in rural communities in the Midwest .

How should buy-and-hold vs. fix-and-flip investors adapt if certain markets start seeing higher distress?

Once those issues are cured a skilled HVAC contractor who understands manual J, S & D can adapt & repair ducting and equipment.

Let’s share strategies so we can all adapt more effectively in this changing space.

It's essential to keep a close eye on market changes and be prepared to adapt your strategy accordingly.

Based on this some elements of my REI strategy are going to need to be adapted!

The question now is who’s positioned to adapt versus who’s left overexposed.Appreciate you bringing that deeper perspective to the table.

Those who adapt quickly will win big.