NOI, Cap Rate, 50% rule - putting them together

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Hello,

I've reviewed the deal analysis page and read through the article shown here multiple times:
http://www.biggerpockets.com/renewsblog/2010/06/30/introduction-to-real-estate-analysis-investing/

1. It is known that 50% of the gross rents will go to expenses. Therefore NOI is usually about half of the gross income.
2. Cap Rate = NOI/Purchase Price and you want to aim for 10%.

Therefore, to get an idea of whether a place is priced right you can multiply the gross rent by 50 and that number should be in the range of the purchase price.

If all this is true, I'm having a very hard time finding properties that fit the above rules or even come close.

I'm looking in Chicago. I am looking to live in one unit and rent out the other/others, however, I'm looking at the price as if I was going to rent out the whole thing. As I'm looking at prices of properties I like, they are nowhere near making the above rules.

So my question is whether the above is realistic for Chicago and if it is am I just better off getting a single family home?

For example, a couple of places I saw that have rental income of $3500 are priced at $400,000. According to the rules mentioned above, this place would have to be in the region of $175,000 for a 10% cap rate to make sense. Is this correct or am I not understanding it?

Thank you for any help to my basic questions and apologies in advance as I'm new at this.