The reason it’s still difficult for many people to invest in flips or rentals is that the current dynamic has changed ever since Covid.

It is more than 10% in cost savings on cap ex?  

The difficult part is, it’s impossible to reach out to anyone once you invest. 

Small signs of investment tell you way more than cap rate comps.One thing I'd add: drive through at different times.

With the tenant paying near the low end of average rent in the area along with proper cushion for maintenance, cap ex, vacancy, etc.

I’m looking for some honest feedback from experienced investors here.I recently analyzed a multifamily deal in California and wanted to share the numbers because it really highlights how challenging cash flow has become here, and why we are focusing on out-of-state markets.32 unitsPurchase price: ~$9.5MCap rate: ~5% (in-place)Avg rents slightly below market but not massively under-rentedLight value-add potential (nothing heavy)Financing: 70–75% LTVCommercial multifamily debt around ~5–6% range25-year amortizationDSCR target 1.25+Once debt service was added:Cash flow was basically neutral (or slightly negative early years)Cash-on-cash ended up far below my targetEven with conservative rent bumps, it didn’t reach my minimum return threshold.I kept asking myself, If cap rates are around 5% and debt is also around 5–6%… where is the cash flow supposed to come from?

“What’s your absolute deal breaker — cap rate, condition, or neighborhood?”

In Metro Vancouver area, the cap rate is low.

Maintenance and cap ex should not be based on a percentage point of rent.

Here is an example of a deal I looked at the other day that I feel like it SHOULD have worked out:Purchase Price: $150,000Down Payment: $37,500 (standard DSCR 30-year fixed rate)Loan Amount: $112,500Closing Costs: $4,500 (estimated 3% purchase price)Rehab Costs: $50,000ARV: $230,000Total Cash Investment: $92,000Property Taxes: $1,759/yrInsurance: $2,000/yr (estimated)Monthly Payment: $748.47Gross Rent: $1600/moVacancy Loss: $96/mo (6%)Property Management: $166.67/mo (8%)Repairs & Maintenance: $128/mo (6%)Cap Ex: $48/mo (3%)NOI: $935.07/mo (Rental Income less Vacancy and Monthly Expenses, Taxes & Insurance)Debt Service: $748.47/moCash Flow: $186.60/moCOC Return: 2.43%I have been shooting for a COC Return of at least 8% and just can’t seem to get the numbers to work.