If the room in question was designated as a bedroom, I doubt parents would want a young child sleeping below them on the 1st floor, especially with the access via the mud room; however, maybe parents would allow their kids who are in their mid to late teens to sleep there?

The broker has it valued with a CAP in the high teens on projected NOI of ~$250k.  20,000 sf with approvals to build an identical 20,000sf on the 8 acre property.  

If the project is a particularly heavy value-add, in other words requires a lot of renovation and even a resident profile change, you could see zero CoC return for the first year, maybe even a bit longer.Factoring in proceeds from sale, you should see IRRs in the mid-teens.  13% to 17% depending on the length of the hold and the risk profile of the investment. 

Rates were once in the mid to high teens in the 80s.

Honestly, I think teens listen more to older teens/ young adults more so than their teachers or parents.

. - Need to get organized, understand kids in a rental vs Teens in rental vs Who the hell knows.

I do consider timing, for example: It's more important that our cash flow be higher for the next 5-8 years because of our teen daughter's education, maybe settling down, and more traditional (expensive) family travel vs. my wife and I "backpacking across Europe" type of travel. 

Skilled trades start in the high teens per hour and by the time you would have finished college you’ll be making 30-60/hr.

It leads to over weight kids working for minimum wage flipping burgers at McDonalds who become obese adults working for minimum wage at McDonalds.2)  The best thing about Section 8 Housing vouchers is their mobility. 

Still, for the time and energy required of a "hands on" real estate investment, I'd imagine investors expect an ROI anywhere in the mid-to-high single digits, all the way up to the mid-to-high teens.