RichardAnybody trying to sell you a 4plex with a value base on a cap rate is trying to take advantage of you. 

If you want to, you can also figure a cap rate, the gross yield, and the Internal Rate of Return, which is like the CCR but uses 5 to 10 years using the annual cash flows.  

By the time I make an offer, there is someone else offering 50k+ a reasonable price under a Cap Rate or Cash on Cash return analysis (Rental analysis).

Again havent tested it but my inclination is that I'm in these properties (with nice cashflow) until the neighborhood really takes off or I'm exiting to an investor at a cap rate that is attractive to them which is prop high single digits ie $65k-80k.  

Most banks here in Canada have a cap on the total  # of properties you can own.Scotia - 10Desjardin - 16 doorsCIBC - 10TD - 14It does not matter the total $ amount of mortgages - it's the number of doors. 

I have a house with a studio in the Aptos area of California that has a cap rate of 7% and would cash flow with your 3.5% down.

To my knowledge a cap rate is only for commercial properties. 

Let's assume it's a Class B property in a Class B area with a cap rate of 8.0. 

I "house hacked" like @Dorothy Ma mentions above, however VA loans have a cap around $420k, and you're very unlikely to find a multifamily property in Denver that will be approved for the loan at that price point.

You keep referencing a cap rate........