How you leverage the deal will impact your return.Prime locations carry a higher price, which translates to lower ROI usually, you should consider appreciation in prime locations, that's where most of your long term returns might lie.Inspect the snot out of it!

Fewer buyers translates into an imperfect market.

. - let me translate what @Bob Bowling said :)Cap Rate is not a good metric of return, but if you use it as such, it uses the NOI (Net Operating Income) as the basis:NOI = Gross Potential Income - Operating Costs (operating costs do not include the debt service).So - the $36,000/annum of presumed CF is the wrong figure to use in a valuation formula since this includes the debt service:Cap Rate = NOI / Value = ($36,000 + Annual Debt Service) / Purchase PriceNow - to Bob's second comment as to why does it matter if Cap Rate really is 2.5%What Bob is likely talking about is that if you buy a building at 10 Cap, force the NOI up by 20%, and turn around and sell at 10 Cap, you will make money in the delta.

A low hourly rate may translate into savings and may not. 

I'm looking for a good number to use for quick analysis (on properties where the LL is paying the water bill), on small buildings up to 10 units.In our SF rental we average about $600/yr, but I'm not sure how directly that translates to a couple units in one building.

I can translate from English BTL investing to US RE investing if you like.Send me an email and we can set up a time for a chat.John Corey

Being a contractor, we have certain budgets for opportunity costs, so if somebody chooses to engage with our services, we could spend around $xxx worth of time and expenses, that usually translates to 4 4-hour blocks.

@Kevin MahoneyA lesson I learned from my first BRRRR is to understand your source(s) of funding and exactly how those sources translate to holding cost during a rehab.

here's why, 1) i dont do a lot of deals in those areas 2)  you statement shows that you have little or no experience in how to look for an good agent  making you look more likely  a new-sought-to-be-investor. no seasoned top agents will want to spend much with with you unless you show them you have deep pockets or what your clear need is.3) lastly, you can find top agents in those areas easily by looking up who has the most frequent paid ads on zillow on trulia, which indicate they spend big money on advertising in those specific zip codes, which also translates to they are crushing it in those areas. best of luck. brian

But of course that doesn't necessarily translate to future growth.