The Proforma Looks Great. The Conservative Numbers Don't.
Robert bought a duplex in Akron three years ago through a turnkey operator. New roof, new HVAC, new furnace — the operator checked every box. The proforma at purchase used 5% vacancy, 7% maintenance, 8% PM. Standard stuff.
His lender just quoted him 6.25% from his current 7.375% rate. He plugged the numbers into RefiSignal using Base Case assumptions. The verdict looked solid. Then he switched to Conservative.
Here's what changed.
The Scenario
| Property | Akron, OH — 1964-built duplex |
| Property value | $162,000 |
| Loan balance | $112,000 |
| Current rate | 7.375% (27 years remaining) |
| Quoted rate | 6.25% (30-year fixed) |
| Monthly rent | $1,750 (two units) |
| Taxes / Insurance | $268 / $98 /mo |
| Closing costs | $3,400 |
| Investment horizon | 10 years |
The property, rate, and closing costs are identical. Only vacancy, maintenance, and PM differ.
What the gap represents
The $140/mo difference isn't hypothetical risk modeling. It's three concrete adjustments:
+3% vacancy (5% → 8%). One extra tenant turnover every few years in a 1964-built duplex is realistic. Older properties attract more turnover than Class A stock, and NE Ohio markets have higher vacancy baseline than coastal metros.
+3% maintenance reserve (7% → 10%). New HVAC and roof are the renovation items investors see. What they don't see: galvanized supply lines, undersized electrical panels, clay sewer laterals, deteriorating drainage tile. Turnkey operators renovate what's visible. Older bones remain.
+2% PM (8% → 10%). Most turnkey investors are out-of-state — that's the pitch. Out-of-state management at a real property manager runs 9–10%, not 8%. Base Case often uses 8% because it's the number that appears in generic benchmarks.
Which assumptions are right for this property?
RefiSignal's Conservative preset (8% / 10% / 10%) was designed specifically for older housing stock. If your property is:
- Pre-1980 construction
- Managed remotely (out-of-state, turnkey)
- Renovated at the systems level but not gut-rehabbed
Run Conservative first. Base Case is appropriate for properties that actually support it — newer builds, self-managed, tight markets.
The verdict under either assumption: Wait
Both scenarios return the same verdict at this rate and cost structure, with a break-even of 2.6 years under Conservative. But look at the starting position: under Conservative assumptions, Robert's property currently generates $96/mo. Under Base Case, it looks like $236/mo. Conservative underwriting reveals a thinner margin for error — which is exactly what it's supposed to do.