In larger mutlifamily properties I typically increase my existing expenses (non-mortgage expenses) by the same growth rate as my revenue.... assuming I have up to date and accurate existing expenses.

However, the higher purchase price made it harder to find a buyer in that neighborhood, as they had trouble qualifying for the larger loan amount.

The window unit you had when he moved in, should be good enough, unless it does not function as it did.However, there are larger air conditioners and there are fans to help circulation from the other rooms.

I would only focus on cap rates for larger assets.

The larger players last I checked were between 10-12%.

Maybe it's a personal choice, or it depends on which state you're conducting real estate business.Originally posted by @Anthony Wick:I’d probably shorten the letter a bit.

Or you could slowly consolidate the properties together to purchase a larger property.

Often times these larger projects look rough, even if there shouldn't be a value problem (should as-is appraise at PP or higher) at purchase price.

However, the specifics can vary by lender.DSCR's are designed to accommodate various investment scenarios, so they can be quite flexible with terms and will typically have slightly higher interest rates compared to traditional loans and might require a larger down payment. 

At a technical level you have two paths, either 1) combining the bottom and ground floor units into a larger unit as you suggested above or 2) create a third legal unit.