This was a pretty clean home with some nice upgrades throughout, especially mechanical and the siding/windows/roof etc.

If the building is in good mechanical shape and you self manage (since you're living there), I think you can keep those numbers lower.

You need to be sure to set aside 10-15% of rents into a fund for maintenance and replacement of mechanicals, roof, etc., and also set aside 5-10% for vacancy periods that come up.

The other replies hit on most of it: foundation, roof and mechanical/electrical issues cost the most. 

So, if he lives in the home, I won't be able to buy it with seller financing it-- either he'll have to sell it himself and I'll have to hope he pays the fee or collection goes well for me, or I'll have to buy it with full payoff.For (4), I won't consider providing any mechanism for the homeowner to regain ownership of the home after I buy it.

I haven't moved a property between personal and LLC (in either direction), so I don't know the mechanics of it and how annoying it would be.

Operating yield is a measure of NOI and NOI has a direct relationship with value.I wasn't really commenting on the mechanics of using the cap rate formula which has been beaten to death on here.

It is like taking your car to a bad mechanic.

How about a mechanic? 

I know about necessary egresses and about quick release mechanisms for window bars and about alarms vs. window bars...