Just because someone implies that they are 'really motivated' doesn't mean a thing.You and the seller need to be clear about what their big problem is that your offer proposes to solve.

A cap rate implies your net rate of return had you paid all cash for the property.

@Rick H. thanks for the response, of course I'm willing to pay that's why I stated in the last section of my post " if anyone had a great source of payable probate leads" implying that I'm willing to pay.

I'm not implying anything here, I have no actual experience, just someone who has done minor research into buying NNN properties, passing along questions that occurred to me.

You didn't mention whether your 1st mortgage was a conforming Freddie/Fannie or an FHA type loan.As Mark implied, you can only have 1 FHA loan at a time (and I believe there's a limit to how often you can get FHA loans as well).  

@Sri YalamA bubble implies that there is an excess of inventory or an unsupported increase in prices.Right now, there is a shortage of housing based on the demand for living in the tri-state area...It would take a lot of building to meet that demand, which means we aren't anywhere near a bubble.It would take a shock to the system to curtail demand.

As my name implies California and my private investors funding loans in California are happy to make 8% to 10%.

Online pole barn warehouses seem to imply 40 year life spans.

Sorry when  I said South West Philly and passyunk in the same breath,  I meant to imply the area before crossing the Schuylkill River..  

To have that return you have to find a good deal, assess that IN FACT it is a good deal, do the rehab and understand all the things that implies (contractor, cost estimation, etc.), identify a tenant who IN FACT turns out to be a good tenant.