Make sure you also have a solid “Pro-Rations” Clause as well.

Also you will need to determine the vacancy ration of the building itself and if there are lease agreements find out the terms of each lease.

The reasoning was this: each side only had one bedroom and bathroom, and I got scared that in the long term this could stop it from renting consistently.My question is this:  is this a rational concern or generally do 1 bedroom / 1 bathroom units rent as well as other units?

Wondering how buyers are rationalizing offers way above asking?

If you accept a bad deal, and rationalize it into a good one, then all kinds of bad things will happen.3 - There are no guarantees. 

I know rationalizing away expenses isn't the way to get a good deal but these seem reasonable to us.

When you let emotions enter the decision making process where investments are involved, those emotions will cause you to make bad choices due to your "heart" rationalizing bad numbers into good numbers.Also, the solutions to every problem are always in the problem...hidden in plain sight.

I admit, I didn't read all the replies.Look at your cash on cash, a CAP rate is a historical performance ration, when buying, you're guessing with your proforma.

There is no pro-ration of the homestead exemption.

At $110K in and rent at $875 (worst case scenario based on your numbers), and assuming 50% expense ration, your cash-on-cash return for a cash purchase is only 4.7%.