The numbers as they are now....even with rounding everything up have a cap rate of around %11.75 I am a commercial insurance adjuster so I know what to look for and where. 

I do think that most people who own a couple multi-families have an intuitive understanding of what a cap rate does and doesn't say, even if they can't explain it very well in writing.

Measuring this property with a cap rate is a bad idea because when your ready to sell and ask lets say $400,000 and your only getting $36,000 a year.

You are taxed at either a lower rate or there is a cap on value if it is the owner's primary residence.

You can get a credit tenant loan at much higher LTV's from lenders because they see it as less risk.With the seller holding back a second you can get in for not much down.Hit a CAP of 7 to 9 going in and with triple net sit back and collect mailbox money.The downside is rent increases are set in stone and may not rise as fast as inflation diminishing returns.Also you have to pay special attention to the vintage of the lease.Typically they go for 20 to 25 years total.A newly signed lease has more security after the store has been built than a vintage 15 years in.They could decide not to renew and when you rent out to the new tenant as a second or third generational space the price per sq ft will typically be lower.So with 2 million I would do some safe CAP properties and then mix in the distressed multifamily for aggressive growth.

My triplex that I was able to snag is running a cap rate of 15% (not normal, it took some work to find and close that deal) but is a hike from my house.My initial look in Milwaukee has been on the northern end, say 60 to 75 st areas.Right now I am thinking about dropping down that way in a few weeks to do some scouting and follow some leads.

I guess what I'm asking is, is there a "cap" to the appreciating costs?

From there, use your CAP rate to get a ballpark #.3) The income that you're running your numbers on is giving a cap rate to rental income.

We use a CAP 8%+, DCR 1.6+ and c/c 12%+ when analyzing.

Selling on a cap analysis for 4 units they are getting 2.7% to 3% cap rate.Exchanging about 1 million or so from proceeds.