there is a reason this is done this way.. and its called MARKETING... keep in mind Commercial brokers do this every day with every flyer I see on apartment complex's the cap rate is almost always derived by best case blue sky not actuals  its up to the buyer to decipher actuals.. and when you buying in the SFR turn key space you have NO actuals you have what your turn key providers is telling you things should work out to.. rent should be this.. and since I just rehabbed it  cap ex over time should be this.. and turn over costs should be this.. and so on and so forth.. so no way to know what your going to make on any rental until you owned it 5 years and have actuals. 

The 1% is based on the gross annual income derived from the rent; example if the rent is $2500 per month, then you should try and get as close to the one percent by not paying more than $300,000 for the property $2500x12=$300,000

The whole point of gaining the net worth is to also derive income from it.

From what I have read the excise and franchise tax are only on entities (LLC, S-corp, etc), and if it's a LLC that's family owned (95%) and "derives substantially all of its income from passive investments" (66.7%+) then you can apply for a waiver of the franchise and excise tax.  

Not sure if it was effective... lolAs you explained, when calculating a price the cap rate is derived from the market (i.e. brokers, other investors, lenders, information sources, etc.) and NOT from some formula by rearranging variables internal to the property. 

However, as is probably clear by now, there are countless ways to slice the data to derive all manner of different rankings.

The court also considered that the income the Floods derived from other sources was modest compared with the sale of the lots.The court concluded that the “preponderance of credible evidence supports a conclusion that the Floods’ real-estate transactions were conducted in the ordinary course of a trade or business and not for investment purposes

Derive your own numbers.  

Percentages only work when they are derived from a dollar estimate and then applied to very similar properties.  

The specific balance and decisions about your investments should be derived from your specific goals and circumstances.I would like to encourage your curiosity and inquiry on investing.