What I worry about though, given our inexperience with a property of this scale, is big surprises or unforeseen expenses.  

I could go down to the 7-8% range (levered up, my cash on cash would still be good), I like 10% because that leaves room for unforeseen additional costs/expenses.  

I figure if it takes 8 months to get fully up and running, another year for proof, and a few more months for something unforeseen, we would be into year 3.

Worst-case scenario, we stop renting after a couple years because of unforeseen life changes (my wife becomes the next octomom or we move once my wife becomes an NP or something), and we are left with a basement that was half funded by other people, right?

It is a twin.Last sold '08 for 96k Zestimate 140k (Id put it more in the 100-115k range ARV)From a drive by as well as the listing pictures this is an estimate of work needed:Roof (its a twin...1500 square foot 2 story..so not a huge roof) Assuming all new flooring Low end appliances Low end kitchen cabinets possibly (smaller kitchen) Clean up property/ Repair/repaint walls Extras/unforeseen due to not walking through yet TOTAL ~20K rehab costs (could be more or less...but for conversations sake to see what numbers work)I am prepared to buy and hold as a rental in the $900-1100 range.

In that case you just view a slightly higher interest rate as a "insurance" policy against unforeseen issues....assuming you escrow a portion of your savings gained via the lower payments for a bit before accelerating the debt paydown.

Lastly What unforeseen issue have you dealt with in buying multifamily units that i need to be aware of?

I mean of course the 70% rule is more a rule of thumb but if you figure up the percentage on this it seems you would be investing in something closer to what we could call the 90% rule lol just doesn't really provide enough cushion for any mistakes or unforeseen costs.

I put away 15K just in case for some unforeseen issues, and worst case scenario I could cash out refinance the property.

You will obviously make some money for "sweat equity" and will not have to take on unforeseen liability for the debt to build and then carry the home.