He applied for an assumption but he didn't qualify last yr.

You are acting under the assumption that they know something to disclose.

@Wayne BrooksThat was my assumption but when I asked the senior manager st the law firm they informed me this would have no impact on the first mortgage.

@Joel Florek you are correct in your assumptions and the rent potential is more like $500/unit with them possibly paying $50/m for their own utilities.  

I'm not 100% sure what that line item relates to, but I believe your assumption is correct, an estimate for agent commission cost to find a tenant.

My assumption is the response you received from your lender was from the loan officer, not an underwriter.

It may be possible that you get a modification /w an assumption of loan or you can look into a reinstatement.

I am more concerned with cash flow and ROI than I am with appreciation.Using my assumptions, the property would have to be purchased for $263,803 to give a cash ROI of 10%, cap rate of 7.59%, and a cash flow per door of $283.49.

Am I correct in my assumption that I need to basically do thorough research on this home because there my be some issues undisclosed?

While there is a "correlation between the two variables [that] is not a perfect 1.0, but rather a more moderate 0.7." one should not make the assumption the two drive each other.There is a good article here: Real estate: The impact of rising interest ratesIn summary it comes to the conclusion: "More importantly, historical data show that changes in Treasury yields do not necessarily result in changes in cap rates.