If you have zero vacancies, zero tenant damage, make sure utilities (especially heat) stay on every winter even if the tenant doesn’t pay.  

Could I be missing something, or is this typical for the market right now?

Typically $2m+ homes don't cashflow due to high taxes, high insurance rates, and low rental demand. 

But you have to understand the seller is taking on a significant risk of having someone else run the property and not knowing if they will get the final payout.If you are getting typical rates, why would you not just buy the property outright with 20% down and obtain mortgage financing from a lender?

@Justin Woods In order to utilize a cost segregation study, the property must be an investment property and placed in service.

You typically don't want to split up construction and engineering services/planning here, but we did this to let us see how well we work with the firm.It's probable, if we work well together, they will also be our GC.

@Loan NguyenRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

It is typical for them to be bad.

I'm a member of one local STR page that vets owners by requiring they see a utility bill with the address and the owner's name.

I typically wouldn't look at new builds but it seems to be very reasonably priced.