., Purchase Price: $475,000 ($197.9/sq. ft.).Estimated Market Value: $402,000 ($168/sq. ft.).Financing Terms: 2% interest rate, with a 9-year balloon.Unit B Income: $2,049/month (Section 8 tenant through November 2025).Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.Monthly Loan Payment (P+I): $1,386.Cash Flow Breakdown (if both units are rented at $2,049/month):Gross Rent: $4,098/month.Vacancy (10%): $410/month.Operating Expenses (37.3%): $1,376/month.Net Cash Flow: $943/month.Key QuestionsWould you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?

.$140k offer8% interest rate20% down8% management fee5% vacancy5% maintenance 5% cap exI haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year. 

As-is cap rate of 7.5% in my market (kc) would be pretty awesome to buy. 

Are you reserving for cap ex, maintenance & vacancy?

In that case, the GP, who was a cheating SOB, issued a K-1 allocating cap gains [§1231 gains] to my Client, who was a minority LP.  

Quote from @John Warren: @Mordechai Chaimovitz cap rates and NOI are commercial real estate terms, and 1-4 units are not really valued in the same way.

Quote from @Sean Kirk: I'm seeing what seems to be 10%+ cap rates on roofstock.

Good occupancy and solid CAP rate.

In addition, in Florida there is a cap on property tax increases each year of about 3.5% increase... but big caveat...

Due to current interest rates, many CAP rates are much lower than they should be and usually there is only so much price discount a non-delinquent seller will be able or willing to offer.