At least a few years ago, the cap on section 8 was pretty low in comparison to market rate for where our building was located.   

Additionally, I like using 1% of purchase price as a general rule for buy/holds in the Nashville market.Rent = $1300- PITI $850- PM $130- 5% cap reserve $65- 5% vac reserve $65= $190 cash flowHow I structured the deal:This is the tricky part and being the first subject to deal I’ve ever done, I hired an attorney.

& Credit Loss (5%): $1,734 (I include the laundry income in this calculation because it is safe to assume that when you experience a vacancy, you will experience an equivalent proportionate loss in laundry usage).Gross Operating Income: $3,2946RE Tax: $5,237Insurance: $1,200Lawn: $870Fuel: $636Electric: $240 (seems low for 12 months of laundry)Water/Sewer: $2,029.94Property Management (10%): $3,294.60Repairs & Maint (5%): $1,647.30Total Expenses: $15,154.84OER: 46% (Lower than 50%, yes, but the 50% rule is for quick assumptions and somewhat worse-case. 46% is realistic for a multifamily, but you still need to verify all of the known variables to be accurate).NOI: $19,525.16CAP (assuming $245,900): 7.94%Now, I don't know the prevailing CAP Rates for 3-families in that part of Manch, but I would have thought they would be better; thereby suggesting that the price is too high.Cash Flow: I'm going to have to make some assumptions here.

No cap gain taxes!  

Also, many HOAs put a cap on the number of allowable rental units (as a percentage of units in complex).

I would love to buy a rental property with a good cap rate, but they are tough to find.  

Right now I am using 8% for Repairs and 8% for Cap Ex.  

Generally, since it's a business, and takes ACTIVE, full-time management, it should have a higher Cap Rate than an apt. bldg. or a manufactured home park.

Sure, it cashflows and has a 15% cap. but still, even with the added income from their first 12 units, there's no way they're paying off the mortgage(s) when they balloon in 5 years (after expenses & taxes all 40 units would bring in about 70k annually.)

Lots of cool features here.What kind of classes are you guys taking right now?