Also, the rules can put a cap on the % of units that can be rented as well.

Im currently in Northern Minnesota, and am looking to invest in Dakota county as well.Looking for that right person(s) to jv with as this would be a remote/ monthly trip for me.Ive done over 100 deals , and had about every type of transaction, that i can think of, across my desk.Im a Ron Legrand, original student and have been with jack miller, jimmy napier, and alot of the earily (pre GURUs) guys who have formed this "creative" real estate passion we all live and breath in.Currently a Dan kennedy , GKIC marketing member, and part of a couple mastermind groups.I am kinda obsessed with real estate, especially the marketing end, and mailing lists, now for quite some time and have seen in good time, and bad a cap up here with these properties at $25-$45K tops!

Im currently in Northern Minnesota, and am looking to invest in Dakota county as well.Looking for that right person(s) to jv with as this would be a remote/ monthly trip for me.Ive done over 100 deals , and had about every type of transaction, that i can think of, across my desk.Im a Ron Legrand, original student and have been with jack miller, jimmy napier, and alot of the earily (pre GURUs) guys who have formed this "creative" real estate passion we all live and breath in.Currently a Dan kennedy , GKIC marketing member, and part of a couple mastermind groups.I am kinda obsessed with real estate, especially the marketing end, and mailing lists, now for quite some time and have seen in good time, and bad a cap up here with these properties at $25-$45K tops!

HUD establishes a cap in every locality.  

Do your investment loans have a cap on the balloon (not to exceed 9% or ..)?

Expenses (taxes, HOA, insurance) are $267/moI came up with a Cap of 8% (the bottom of where I am comfortable).If I had $80k in cash sitting around, I would jump on this deal, but as it stands we would have to either 1) buy in a self-directed IRA for a longterm investment or 2) cash out part of our IRA, take a tax hit now, but enjoy $600/mo extra income forever.

Do you think he put a cap on to access the shut off?  

Or put another way, if you could get it for $50k, wouldn't you be getting a cap rate return of  around 20%?

@Steve LymanBased on what you've presented here, looks OK with a Cap Rate is about 9.6% with about 2202 in cash flow a month.

Based on a cap rate of 10%, the most I would want to pay is $109,200.