Hi all,I invest in, and manage, single family long term rentals.  

STRs and LTRs have their own "cash flow" dynamics, which really boil down to the specific city and neighborhood you intend to invest in.STRs usually bring in a higher cash flow potential, but also come with higher operating costs, frequent guest turnovers, seasonal price adjustments, etc., etc.

Pre-construction properties can be appealing for appreciation, especially in high-demand areas, but they’re usually not strong for immediate cash flow since there are often HOA fees, carrying costs, and delays before you can rent.

The IRS treats STRs differently from long-term rentals if the average guest stay is 7 days or less.

They usually have a pulse on which agents understand investor deals and which neighborhoods make sense for long term rentals.

This can further increase the return, sometimes to the extent of achieving infinite return.I do agree with your sentiment that initial cash flow has a poor correlation to long term return but will add it has a poor correlation to long term cash flow.

That being said, these rates are “SHORT-TERM”…not the longer term rates that mortgages use.

Purchase price: $2,300,000 Cash invested: $1,100,000 This building needed some desperate attention.

I have a duplex for LTR but it's not cash-flowing well.

If you have the cash for 1-2 properties now, you can keep the cash out refi in your back pocket for when you want to add more.