The potential tenants from the realtor were much better quality than what I was getting online and from my yard sign.  

Building constructed in 1980Present loan value appx $77k on a 15 yr note with 3.375% interestP&I pmt is appx $602NOI 2014 was $11489NOI 2013 was $5142      (spent around $4k on updates/remodeling)Appx $27k by my calculations of capital improvements needed in the next 5-10 years to increase the value of the property, properly maintain it, and keep it functionally up to date in order to attract higher quality tenants (located in a b grade area) (I'd rather have more invested to have higher quality tenants - have my own reasons for this line of thinking - willing to sacrifice a bit of profit to have good people)- Redo Kitchens- replace doors and all base trim/casing (more for my taste and would help the place rent out even quicker)- 2 escape windows installed for basement bedrooms- Concrete work needed on patios and near front of the house -- need to be done in the next yearProperty based on comps in the immediate area and a tight supply of decent duplexes here is $175-210k or so.  

The two questions we should be asking ourselves is it quality or quantity that matter and is it more important to have a higher cash flow with less units or would you rather have more units with less cash flow? 

You're better off combing through 100 deals to find one that's in a great area that gets you 1% with appreciation potential and quality tenants, in an A or B area, rather than 2% or 3% in a bad area.

I'd really like to get something going in Southern California too but I might have to look at SFR's just because of the scarcity of quality affordable (based on my position) multi-family's.  

He is a great guy that does quality work.  

Along with what they said, I would arrange with the seller to immediately have security cameras with audio installed in all public areas.  

Great point Kyle J; quality tenants are obviously great, just a bit concerned that more requests might come down the pipe and start eating into our baby cash flow. 

I have been lurking in the forums and listened to every podcast, listened to audio books, became a pro member.

And it is more reasonable to buy better quality as this is your chance to get potential higher equity with 3.5% down - you are "buying" cashflow today and potential equity in the future and a headache of course :))) so all three parameters are better with a better quality 4 plx, risk is higher though but in my experience better quality small Multi Families are appreciating better.