But agreed, a lot of single folks or young couples will rent that upper (I bet it's a bungalow, or a cape cod, right?). 

If we looked at  it at the beginning strictly from a cap rate perspective, we most likely would have been stuck in a stalemate with the seller and missed out on an great opportunity.

IF that’s the true NOI after all expenses including taxes and insurance and reserve fund then that’s a cap of 13% or so which is great... you’ll also want to factor in some sort of vacancy rate as well just in case.

Another benefit is less foundation and water issues to deal with from a cap ex perspective.  

There's a couple more identical size/type duplex's on the other side of the street that are listened in the low 160's and those have been sitting for over 6 months now.A quick analysis of the $155K one with a cap rate.

For one, I am trying to buy a bigger house and put my current residence on rent, so showing this in my personal credit will limit my ability of lending and secondly I would like to roll this money to increase my Rental portfolio, and again, with what shows in my current W2, there would be a cap on how much I will be able to finance.

This is really what a "Cap Rate" is, is the risk associated for a given level of cash flow (generally higher risk deals have a higher cap rate)...

That's right, these two co-warriors will find failing multi family properties ranging from duplexes to 100+ units and tough love the owners either into shape, or out onto the street through a 3 month lease option that allows Ben/Brandon the property at a cap rate of 784%.  

You can then use a Gross Rent Multiplier (GRM) to determine the ARV or back into a number using a CAP Rate.  

For example, to back out commercial property value from NOI, you use a CAP rate ... the CAP rate is set by the local market and is subject to change/cycle.