A cap of 7-8 in the Denver market on a fourplex, in a place you would actually want to live is pretty good here.

I believe that a capable twenty-something, with an eye open for opportunity, is going to find a better use for that $5,500 than putting it in a Roth and indexing it over 30 years.

late to the convo this might be a dumb question or already addressed but is there now a cap on property taxes up to $10,000?

also you probably would do better with a cap rate closer to 7 or 8 or 9 and if your lucky 10. 

I typically get a cap rate of about 7% on a SFR.  

Also, if you are lucky you might find something in Ft Myers in a D class area that might have a cap rate of 10.

@Jim Adrian Texas doesn't have a cap (at least not at state level) for deposits.

There is a cap on how much you can cut back your expenses, but there is no ceiling to how much you can increase your income.Early on in my investing career my primary focus was to cut back on expenses, but as my income and net worth has grown, I focus on increasing my income and adding more sources of income.

In my formula, the property has to cash flow or cash flow in a reasonable amount of time due to management. however, I typically do not take any money out of the business as it is for college education for my children. therefore, I am putting everything back into the properties which covers the capital expenditures that are needed. so if you want/need a certain amount of income I would add a cap expense and increase the maintenance.I am currently looking at a 96 unit class c property that appears to be similar to your example.

Saying a cap rate number without any support is just useless.