Now we're seeing investors pouring money into buying Class C rentals - but, many are getting burned.In our experience & opinion, the main determinant of property Class is not location or even property condition, those are #2 and #3.

Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”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.

Student housing just hit roughly 95% occupancy for Fall 2025, while many conventional multifamily assets are still hovering under 90%.That’s a pretty wild gap when you think about it.Even with higher rates and tighter lending conditions, demand for quality, campus-adjacent housing hasn’t slowed down.

Quote from @Marco Solis: Moe,I would like to get $2,000, but I will need to do more research on market conditions once all the renovations are complete.$2000 on a 200k investment is excellent; it passes the 1% rule, which is kind of unheard of nowadays.

Other considerations that should influence cost of equity: GP track record; if there were heavy lift entitlements completed by the GP before capital partner entry; financing terms secured by the GP (often closely associated with imputed equity generated through entitlements); general market or economic conditions are a few to come to mind.

@Brandi Smith, Here is a decent one from oklahoma.govhttps://oklahoma.gov/content/dam/ok/en/orec/documents/contra...It has a section for additional conditions so be sure to add anything specific to your propertyBe Well!

One thing I wish I knew early on was that there are always deals, no matter the broader market conditions.

That is when I asked the first contractor to check who said the roof is in a disaster condition and he can fix it for 700 which lasts 1, 2 years(or do repl;acement for 14400).

Basically in my lease terms the renters are responsible for returning in the same condition minus normal wear and tear.  

A bit like having a health coach sit in on your doctor's appointment to ask the questions you might not have thought to ask.