The bill has set a cap at 7% plus inflation which was 1.9% last year.

If you "add back" the mortgage expense, Net Operating Income (NOI) is approximately $13,200 for the year, which equals a cap rate of 5.39%.

Per the OP, she was guaranteed a rental rate and a cap rate with the TK provider making up the difference ( I assume only for a set period of time ) Therefore, the TK is considered about vacancies and PM issues as they lower their profit

I am currently in the process of building a custom home for 320k in Raleigh,NC.The sq ft of the home is 1975 and with the add on of a bonus the total is 2343 and also a screened in porch 18x12.It's a cape cod style home from frank betz "stoneleigh cottage" look it up if you can!

Imagine a shopping center where certain tenants pay taxes, insurance, maintenance while others pay a flat rate or a capped amount for maintenance. 

Unless you want to build from the ground up brand new to get a cap rate to cost of 9.95, buy value add that needs to be stabilized to get to an 8 to 9,etc. for a good area then it isn't going to really happen.

@Matt Mason MI has a cap too...right up to the sale.  

For example, in an over-priced market in a socialist area, a real estate agent might tell you that a property has a great cap rate and elaborate that the market cap rate is 5.0 and the property he's selling has a cap rate of 5.5!

I use Net operating income divided by a cap rate that I am willing to accept based on the property location and condition.

The simplest foolproof strategies is to have full downpayment for conventional loan, investing in some rental with a cap rate 6-8% so that gives you positive cashflow.