Every area has a max or cap, and you don't want to go over that.

However, it is a highly desirable area which results in very low cap rates.

Since I am having my prospective tenants cover the cost I would prefer to have the lowest cost option that gives you the most bang for your buck, but at the same time I want to be sure that what I am paying for is reliable.

You cite his banging on the door and uttering profanities which means you or someone else witnessed it and told you about it.

Is this structure standard, though, in terms of capping investor returns at 12%?  

Others have caps on how many nights a property can be rented or outright bans on certain types of rentals.

I have a similar product in NE GA, turnkey, going in 9 cap. 

$500 per day penalty up to $10,000 and up to 2 years in prison for willful evasion per entityNo cap on the amount of entity penaltiesCheck with your CPA, Tax Advisor or attorney on this as it is a freight train of compliance coming!

Expect rates to be higher with CLTV capped at 70%. 

(I’m ignoring any extra cap-x because you said it was a condo, but you’d also add any major cap-x to cost basis).