Realize value adds typically require work and have risk   - use a rent model other than traditional LTR.  

Is the income approach for appraisal typically used, since you'll be renting out all units?

This typically includes a tax advisor with real estate expertise and an asset protection attorney who understands your specific goals and risk tolerance.

DSTs typically have a 2–6 year holding period before the sponsor sells.

While results vary by market, a typical cash-on-cash return on investment (ROI) can range from 8–12%, with top-performing properties in peak markets potentially reaching 20% or more, especially when financed.

Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.Tenant Default: 20-30% probability of eviction or early lease termination.Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.Vacancies: 20%+, depending on market conditions and tenant screening.Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.Where did we get our FICO credit score information from?

@Justin Unck The IRS defines a “day” as a full calendar day, midnight to midnight, so an overnight stay typically counts as two rental days (e.g., Friday and Saturday if guests stay Friday night through Sunday morning).

Is this rate typical?

When looking for your second property, I’d focus on:Performance over location loyalty — even if Evansville has treated you well, always run fresh numbers to make sure deals still cash flow with current prices, rents, and expenses.Diversification — if your first property is a duplex, consider whether another small multi, a single-family rental, or even a different tenant class would balance your portfolio and risk.Tenant demand & turnover trends — check rent growth, vacancy rates, and neighborhood changes before committing.I work exclusively in the Memphis, TN market, and many investors who start in one city (like Evansville) end up adding Memphis to their portfolio for the strong rent-to-price ratios, steady tenant demand, and landlord-friendly environment.If you ever decide to explore out-of-state options, I can share what returns typically look like here and connect you with trusted local resources so you’re set up with the right team from day one.

I will say that "gap funding" is not something that legit lenders typically allow.