The cost to build will also be a determining factor. 

I know people look at schools in the area and the rest of the neighborhood, but what other external criteria do you go off of to analyze the micro market?

Kids are noisy and smelly but not when the tenants are there :)I specifically like daycare because of a few factors. 1) It is internet resistant - you can't put your kid on the internet so you won't lose tenants to that in the same way you could lose a retail or office tenant to the internet. 2) It's always a need that will be there 3) A lot of times these days daycares are supported in some way with government funding.One thing to pay careful attention to, as mentioned above, is the lease.

ROI is not the primary motivating factor.

If all the usual factors are against me (high utility bills, bad interest rates, vacancy, etc) then I will make 2K…if the stars align than I might hit 12K in a year.In a completely fabricated example, the below screenshot indicates that I have a 33% chance of having a negative cashflow on an annual basis (small red text at the $0 mark).Models like these are pretty simple to construct.Simulation InstructionsTo get started:1.Install the excel add inI like ModelRisk, it is free but there is also @Risk by Palisade.

Biggest factor for me is overall goal and interest rate difference. 

I also don’t have a long history of credit which could be a factor but than again I have no debt so not sure why but i am shopping around. 

The property if i moved would rent around $2300 total for both units, does the rent factor into the appraisal at all?

We're intending to buy our first deal this year and plan on having a PM from the get go, just factored into the cost of doing business. 

There are a lot of factors that make an area ideal for multifamily investing: low unemployment rates, low crime, increasing rent prices, low purchase prices, high tenant demand, and more.