All in all we think it's a conservative approach. :)@Levi T. the LP raise was 2.1 million.

A typical analysis would say if my projected rental income (conservative modeling) dropped 10% and occupancy dropped to say 81%, am I still able to B/E and pay the debt and provide what level of CoC return to my investor.  

If you are looking for highest returns then owning outright is the most conservative and lowest possible return available due to the opportunity value of your equity.

I have run the numbers and the property will cash flow very well after rehab using conservative numbers.

And, does that goal seem too conservative?

They are all way overvalued for how they perform.I'm doing 20k as a conservative estimate, but I don't honestly see it going terribly higher.

My strategy would be to hold onto this property for 20 years while my parents receive the income and then cash out when the market is right.Rent: 8% gross salesCap Rate: 6%Base Term on rents: 11 years with 3 10 year options.In my projections I'm assuming sales increase 1% a year below 3.5% inflation.Using this conservative assumption IRR is close to 9.5% over 20 years (assuming an exit value with 7% cap).Does this sound like a good investment strategy?

However, if you get good tenants they can cash flow on day one using conservative cap expense estimates and not require much time. 

You will see they are investing in the strongest markets, have great broker networks / access to deals which is critical in a highly competitive market, can raise significant capital to take advantage of scale, more disciplined / conservative underwriting models, have simple well thought out business plans to increase the properties value, using fixed rate 10yr loans to take advantage of still incredibly low rates historically speaking and use more sophisticated tool sets to help understand how fluctuations in occupancy, rents, etc may impact their models.  

,You seem conservative in your approach and your $40k/year goal is so achievable in 5 years without leveraging up the wazoo like others suggested.