Cash on cash returns of 33.74%, buying at a 7.42% cap rate, Proforma cap rate is 12.82%.

Is there appreciation growth potential or has that capped.2.

As Gino noted, if you buy a lot in cash, that can often be contributed as equity in the deal for the loan, but depending on the value and LTV ratios including your current mortgages on the existing properties, you may have very little equity available to tap into from a refi/HELOC.It has been a while, but the construction loans I have been quoted have been 80% LTV of after construction value, capped at 80% of actual cost.  

@Jack Mi: my first impression is anyone that is buying a deal at a 4.5% going-in cap rate with 7% interest rate is anything by conservative.Now, there are so many details missing that it is impossible to give any true thoughts.The things I like:No up front fees, so less motivation to simply transact10% Co-invest is pretty good80/20 (assuming there is no second hurdle) is fairly good.Things that give me pause, based on what is actually presented:Going-in cap rate is very slim.  

CAP from my calculation is +10% so naturally I am going to scrutinize.

With the exception of finding the tenants (I use an agent) I manage all maintenance aspects of the property but am coming to a point where I might want to move on and considering doing a 1031 exchange to of course avoid Cap Gains and invest in another property closer to my primary residence.

Multifamily DSCR Loans (https://www.biggerpockets.com/blog/multifamily-dscr-loans) would likely be a perfect fit for this but unfortunately are pretty much always capped at 10 units...

Cap Rate: Net operating income divided by the property price.

. - Is income capped so we are helping those most in need. 

Also, our fee is 7% but capped at $149.