But I could easily make this a 3 bed, 2 bath within the existing sq ft. 

Then, the lease will be up in the summer when the demand is higher to get better returns 

However if I do a BRRRR I can achieve infinite return by extracting all of my investment.

I have had a lot of success purchasing 5 bedrooms houses next to larger universities and have been able to easily find tenants.

For example, theirs is relatively less maintenance and comps are easier to find.If you're looking to maximize returns, typically SFH and multi family would yield better returns and wouldn't have the risk of HOA fees increasing.

Know the value of your property and make sure all buyer due diligence is easily available.  5.  

If an asset is throwing off a certain yield that is not commiserate with it's risk, then investors will then begin paying more for that asset, thus decreasing it's yield....or start paying less for the asset which would increase it's yield, until it was at the proper risk/return rate to produce the yield that is truly reflective of it's risk.The problem is novice real estate investors get the risk/reward correlation backwards.

My point is cash flow is only one source of return on RE and in my opinion the least desired because it gets taxed annually.  

I don't think RE returns are going to touch that.

The numbers could make sense if you do STR, but it's still tough because the pricing for multis is high and the long-term rental return isn't that great.