But for us who derive our wealth from it, yeah, it's kinda important. 

Of course, cap rate is what you use to derive value for a couple of SFRs, comps are.

The lender sent me a email stating the following,Felix, I spoke with my underwriter and the FHA guidelines on deriving income.FHA looks at current employment, as well as past employment.Because of the job changes over the past 2 years, schooling (which made sense and enhanced your career)FHA looks for a more consistent employment history and would want to see more time at your current job.I feel if you can get close to 2 years with your current employer, you will be better suited to meet FHA guidelines.I am sorry for the delay in getting back to you and would still like to work with you in the future.I was upfront about my employment history and even wrote a letter explaining any and all gaps in my employment history at our very first visit.

However, Freddie recently changed their guideline to now require 2 years of tax returns unless the business you are deriving the self employment income has been in existence at least five years.

@Ben Leybovich  the biggest issue I see using cap rate for SFR is most rental SFR's are sold with no history of performance so its all blue sky any way.. just like pro forma's on multi that are all based on best case scenarios to derive at a cap rate. a combination of actual sales comps and GRM is probably more appropriate in the SFR space..

For now, I plan on keeping my deals broad to derive what I truly enjoy and what my market primarily supports.

@Adrian FajardoYes, you can derive the currently prevailing market cap rate from recently sold properties that are comparable to the property you are analyzing.

Also, I agree with Jeff Valentino; no where in your analysis did I see any comparable sales and values derived from that ... this is how you value a duplex, and even if you don't want to value it that way, that is the way the appraiser will value it before you get a loan.

I would assume that the idea of making money as the years pass is derived from the idea that 1) you will accumulate more properties and 2) you will eventually pay down those houses and once they're paid off you won't have a mortgage to worry about anymore.

Title companies won't always offer title insurance on title derived by sheriff deeds so it's risky to the deed unless you know up front you can get it.