I am not sure what my next move is (stay with the DST and lose $ or move to the REIT and eventually have to pay cap gains tax if performance isn't good). 

Note: We do 50+ investment property loans a month and the most important thing I tell BUYERS of properties being sold as or soon to be STR is make sure you are paying the market price per square foot and do NOT buy based on income approach/CAP rate.

One of these restrictions is a cap on how much income we can require (max 2 or 2.5 times rent depending on the rental rate).

Vacancy, maintenance/cap ex, PM, Misc.  

We are lucky to earn a 9-10% cap on our outlay.The turnkey company then manages the property and gets paid the management fee and all the extra fees associated with the management, such as turnovers and lease-ups, repairs, and sometimes sales costs.

I own properties in cleveland and yes one might argue that cap rates are a bit lower than in detroit but the market isn't as overheated and there are plenty of opportunities.

The cap rate on the property was a little over 4.5%.

Haven't seen an 8.5% cap since 4 qtr. 2009! 

During your analysis did you include a percentage amount for vacancy, maintenance, and cap x?

Learn about the Net Operating Income (NOI) and Capitalization Rate (Cap Rate)—these are essential to analyzing the potential profitability of a property.Return on Investment (ROI): There are different ways to calculate ROI in real estate, such as looking at your total return after a sale or assessing your rental income versus initial investment.