See the chart from Fair Isaac Company (FICO) below: FICO Score Pct of Population Default Probability 800 or more 13.00% 1.00% 750-799 27.00% 1.00% 700-749 18.00% 4.40% 650-699 15.00% 8.90% 600-649 12.00% 15.80% 550-599 8.00% 22.50% 500-549 5.00% 28.40% Less than 499 2.00% 41.00% Source: Fair Isaac CompanyAccording to this chart, investors should use corresponding vacancy + tenant-nonperformance factors of approximately 5% for Class A rentals, 10% for Class B and 20% for Class C.To address Class C payment challenges, many industry "experts" are now selling programs to newbie investors about how Section 8 tenants are the cure.

I think this momentum really comes from a broader awareness of two national issues: housing availability and affordability.Good investors will always view those challenges through the lens of opportunity — and ADUs sit right at that intersection.

My Ultimate Goal: build a brand that will be trusted and recognized for challenging the standard of American housing, one house at a time. 

I believe most units/hosts will not meet each of those criteria and will be challenged to exceed LTR income by enough to justify the additional work.  

Hi @Brice Peterson,You’re right, finding the right duplexes in Columbia can be a challenge with limited inventory and budget considerations.

The challenge right now is that those rates are running 8.5%+, which seems unnecessarily high.I’m trying to think creatively to either lower the rate a couple points or improve the overall structure. 

BRRRR is very challenging right now but still a possibility.hope this helps.  

Challenges?

Challenges?

Challenges?