The big difference when I break the 2 appraisals down, the one last year used a 6.6% Cap Rate.

I'm not aware of a cap though if there is one.Breakdown:- 7 invoices total and they're all unique for each part of reno (separate invoice for flooring, shower tile, demo, etc).- I'm using the total amount for each invoice and the highest one is $2,500.

Flat rents, higher insurance/taxes, and exit caps that are wider than acquisition caps.

But when I model the "Year 2 Uncapping" (where Taxable Value resets to match the SEV/Assessed Value), the tax jump is massive—often tripling the tax bill and wiping out the cash flow entirely.For example, on a recent duplex lead in Warren Mi:Asking Price: $235kCurrent Taxes: ~$3,200 (capped for long-term owner)Est.

I find nothing wrong with break even if 1) the total return is good 2) your leverage is high to achieve this 3) your projection is accurate and includes future cap ex.before the rates increased starting 2022, I actively worked to minimize cash flow (which mostly means I worked to maximize leverage).  

That makes a lot of sense, Doug — especially the point about avoiding properties where comps are difficult to support.

A few questions: How do you verify the sponsor’s projections (rent growth, cap rate assumptions, exit numbers)?

You are running into a common scenario, most retail banks cap cash-out refis at 80% of equity.

Many fintech layers impose their own ACH/debit caps for fraud control, even if the underlying bank technically allows higher limits.

If you can analyze cap rates, cash-on-cash returns, renovation ROI, and tax impact, you’ll create your own edge.