And depending on how long I asked the loan to be for, of course the proportion of the total amount each month allocated to principal must be much smaller at the beginning, than towards the end.ie.

On the other hand, I think the future will place a great deal of value on a ground floor, wheelchair accessible suite as the proportion of seniors continues to grow.

Proportionally that sounds like it would only do about 0.9% just renting out the 3/1, if you didn't account for the rehab cost in that denominator you'll be at an even lower %.

It continually surprises me that at this price point, there are so many that would seem happy to pay $1,600/m rent for half a duplex, rather than go for their own mortgage of say $850/m, to own the same proportion.

If, by including a significant proportion of its provable income, your DTI is still negatively impacted too much, then are you sure it's a good deal anyway? 

Possibility of higher repair costs: i.e. an overflowing bathtub on a high floor may require repairs to several unitsHigher turnover rate - turnover is costly because property must be cleaned and repaired, plus the legal and other costsVacancies take a proportionally larger bite from your incomeApartment complex investment Cons:Requires more secure financing when more than four units, including higher down payment and reservesManagement fees eat into profitsVulnerable to a downturn in the community, since all units are in a single placeRelatively illiquid investment, costly to dispose ofPossibility of deadbeat tenantsFrequent turnover

3) Or since a proportioned ~$199K of the exchanged purchase is sheltered LTCG, although there was no prior depreciation, is the new property BASIS impacted?

@Shawn Clark the rents and property value are not increasing in proportion to the tax bill. 

Thus, if you can increase your net operating income, your building’s value can raise by a proportional amount.

Thus, if you can increase your net operating income, your building’s value can raise by a proportional amount.