Agree totally with @Matt K....this is the first really good advice I've seen on this site in a long time...Foremost, markets exist in many forms and no two are the same (even in the same neighborhood)...if you're buying duplexes then looking at Marcus & Millichap reports is a waste of time...and CAP is simply an estimate of what investors are willing to settle for...would knowing that your target area is only producing a 4 CAP alter your marketing to sellers as you work on your next acquisition of a deep discount deal...perhaps on a purchase money mortgage or lease option?...

In Denver this means you cannot alter the exterior of the building and you need the Historic Commission approval.

Depending on the zoning laws you might be able to alter the property to benefit your potential for rent. 

Worst case scenario, this seller is capping the income from the POHs with the lot rents and he may not be deducting the expenses associated with maintaining the POHs from the P&L which would alter the financials and give you a distorted NOI and thus a grossly inaccurate cap rate. $525,000 Sale Price-----------> 12% Cap Rate-----------------------------------------525,000 x .12 = $63,000  The NOI may or may not be too far exaggerated or off, can he support this claim with documentation and rent rolls for prior 3 years?

We really don't have to alter the space much to make this happen.

It won't quite get you to 10% the first year, and these ratios only produce about $1,200-1,800/year in cash flow, but they are good homes, easy to rent to decent tenants, better homes with lower maintenance costs, and usually retain tenants longer.The lower you go in the market your numbers get altered by things like:Shorter tenanciesLonger vacanciesMore expensive maintenance (especially on older homes)More late paymentsMore likely evictionsDrama...

If it is grandfathered in as a 2 unit coach house a major alteration of that could have voided that status so it may need to be rebuilt as it's new conforming status 

If a tenant replaces or alters any item in the house without your permission and knowledge.... then they are responsible for returning the unit back to the original condition....which they can't do since they got rid of the original toilets.This is a battle I would not fight while the tenant is in place...... let them take the toilets and then charge them for them once they move out since the unit is no longer in the same condition it was on move in.If the toilets were broken and the tenant notified me, I would have replaced them...... since they made no indication of an issue and took it upon themselves to alter my unit, I'm not paying for anything they changed

The tenant does not have the legal right to "alter" your property for any reason - and a mold inspector may drill holes, remove back cabinet panels under sinks, and a whole host of invasive procedures. 

They only know one alterative to selling a home.