They look at the overall deal to make sure that our margins aren't too tight and that the comps are conservative to account for market fluctuations, going over schedule etc. 

Capitalization rate = Expected Net Operating Income / Market Value of the Asset.Since actual NOI and Market Value are constantly fluctuating, so will the cap rate.

The Medford rental market is strong and has very very low vacancy rates .5% - 1.5% fluctuating.

That discount as well as the vintage of the loans insulates the fund, in a sense, from fluctuation in market rates rising and falling.There is a correlation to investor desired returns and prevailing market interest rates and returns however in general the closer you are to market returns via market interest the more sensitive the investment would be to rate movement.  

The day to day, or even yearly fluctuations of the market are irrelevant to me.

They may fluctuate slightly up or down at any given time, but they've appreciated overall if anything. 

It's a fine line between keeping equity down and staying safe in a fluctuating market.

But I am aware of fluctuations in the utilities.

We're hoping that we can manage to get tenants to turn over in the summer, where we can spend a couple of weeks down in DC combining a little vacation in the place with fixing things up and finding a new tenant).Of course I made some mistakes already, too, but I think I'll get away with them this time...So after getting my feet wet, I've been reading about REI, and we do have cash / equity (our primary home is just about paid off) to stuff with, so now I'm considering to get into it in a non-accidental way, and it seems more prudent to look at our local area (NH seacost), but it turns out I have little idea about the purchase/rental market here, and it doesn't seem all that easy to find out (in NoVA, at least, there's a very active market, while here prices seem to fluctuate wildly for no obvious (to me) reason.

Best way to find local CAP rate is to talk to commercial realtor and ask them what it is, or see what other properties have sold for recently, but you would need to know their NOI. you can't assume the percentage for maintenance ( not just maintenance, utilities, taxes, water, sewer, etc to determine your NOI ) you have the numbers, as inconsistent as they seem to be, some should remain constant, those that fluctuate try to use an average.