You really need to understand and visualize  how a rehab is going to be done.

No, no laundry there, but there's definitely space for storage, although the basements were pretty clean, when I did my visual walk-through, before purchasing the 4-plex.

Again, I'm a total newbie so I am well aware there are plenty of things I'm visualizing incorrectly, which is why I'm here asking for help :)

As a performance metric, there certainly is a relationship between cap rate and interest rate since interest rate does affect performance of the investment.Using cap rate as a performance metric, I think your understanding of the dynamics between cap rate, interest rate (i.e. cost of capital) and cash-on-cash is generally correct.

Alex, I'm not familiar with the dynamics of the market in Salem.

@Elijah FastYour lender and possible your insurer will require a Phase 1 assessment .... this is predominately a visual inspection and paper exercise (costing anywhere from $750 - $2500) with the objective of discovering any potential contamination of the property (or demonstrating that there is none).An abandoned underground storage tank (UST) is something which should be disclosed by the vendor (it appears that it has been in this instance), but it is an example of the sorts of things a Phase 1 ESA looks to discover.Depending on the results of the Phase 1, you may very well be requested to continue with a Phase II ESA.Having a Phase 1 lets you know what you are walking into ... which is why lenders want them.  

In addition, the market dynamics make it seem like continued rent appreciation over the next few years is very likely. 

or "subject to visual inspection" however you want to add it in the additional terms on the purchase agreement..  

just to clarify the dynamic a family member will fund the deal though home equity I will find the property manage contractors and perform much of the rehab myself.

You get a quicker sale because the buyer can literally visualize EXACTLY how the house will look.You'll find REALLY cheap and Nice stuff on Craigslist.com & your price can cover the costs.