@Nicholas UrcuioliFirst of all you wouldn’t value a three unit building based on Cape Rate.Four units and under are considered residential and you would use the price comparison approach on an appraisal.Cap Rate is purely a measure of risk and never a measure of your actual cash on cash returns or future gross profitPlaces like San Francisco Los Angeles and Manhattan have way more renters (demand)  then there are vacant units (supply).This makes these markets extremely safe because the risk of the whole building becoming vacant is almost 0Markets with higher Rates like Ohio or Alabama must pay a higher return on investment because they are riskier markets with much higher vacancy rates and demand and Manhattan have way more renters parenthesedemand

It's because buyer demand for value growth along with rent growth long term tends to be in the more desirable areas.The low end areas buyers many times purchase hoping for high cash flow only to land problem tenants that don't pay and wear down already old and outdated properties.

She doubled down asserting that I'm disrespectful for waking her up with my alarm repeatedly and demanding a roommate meeting. 

See lines 268-276 on page 7 of the state contract:"DEFAULT OF AGREEMENT BY BUYER: In the event of any default of this Agreement by the BUYER, the SELLER shall have at the SELLER’S option the right to declare this Agreement null and void with no further demand, or to demand and sue for any of the following: 1) Termination of this Agreement; 2) Specific performance; 3) Termination of this Agreement and an amount equal to 10% of the Sale Price as stipulated damages.

You can boot these people or maybe piss them off with high demands.. and buy carpet and paint NOW with several months of vacancy. 

Also in regards to reserve/vacancy for STNL a buyer can try and manipulate numbers any way they want and that doesn't change the market demand for these properties.Try to knock down a cap rate based on real NOI from a developer selling or a listing broker when the quality properties they are receiving full asking and 4 offers within days of listing will get an investor laughed at. 

I would put the area into airdna.co (using a free account), just to see the other listings in the area so you can have an idea of the demand.

On demand Cash flow is always available in the market by selling options.

Demand is insane for rentals under $1600/month. 

@Kevin Zolea it depends on the size of the unit and the demand but I’ve seen $50-$300