I’m curious your thoughts on this aspect of multi family, at least in my market & I think this is relatively true thoughout the country, most small multi family tends to be in the city and for the most part in frankly not greats areas of the city (could do a whole nother post on this history of zoning) as cities decline & specifically c & d class areas seem to being hit extremely hard, I wonder if small multi falls into this strange gap where it’s not really profitable for investors but is increasingly unappealing for owner occupants, house hacking types?

If they are under market they'll likely decline.3.

With respect to the owner, who I briefly met at a conference, I don't like declining mid sized midwestern industrial towns. 

We expect a return of $681k with no market growth or decline.

Seller financing does not always sell for more money and if there are big price declines then you may end up having to forecloseMy recommendation is to sell it with borrower getting traditional financing and put that $ in a tax friendlier account than loan interest = ordinary income rates

Also, if searching for towns closer to you, I hear that Bethlehem, Allentown and Scranton are bouncing back after long declines but are still affordable.

The property owner let the building decline for many years, but the location is prime.

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I am no longer an SFR investor but if I was, I would look into investing in cyclical markets that have experienced recent large price declines (and make higher down payments than 20% to drive breakeven cash flow at inception and increased cash flow as rents (and values) increase).

I am thinking Austin TX might be a good place to start due to the state's tax incentives and the recent decline in prices.