We always choose deals in which the property and capital expenditure costs are lower than the value of neighborhood comps. Why? Because the difference is that equity is there for the taking, and that boosts cash flow at sale! Consider this – if the acquisition combined with the capital expenditure costs equal (or are greater) than comparable properties in the neighborhood, then the sponsor is paying too much for the property and profits at sale (or return of equity if refinanced) will be drastically diminished.