And, you're tying up $75k in liquidity.My personal recommendation would be to look at lower cost properties, if you're looking to get into long-term hold/rentals. 

Lowers my competition.Justin:Take a look at this Spreadsheet:What it seems like Gallinelli is saying is that you should create 2 different scenarios, one pessimistic (selling at a 9.5% Cap Rate) and one that's optimistic (selling at 8.5% Cap Rate).If I run the pessimistic numbers, the Selling price at the 9.5% Cap Rate in Year 5 would be Year 5 NOI / 9.5% = $152,605 / 9.5% = you would sell the building at $1.606 Million.

I know underwriting will basically default to using the lower of the two - net income and distributions.

I normally only say yes to SFH's under certain conditions but you sounded like you have a few units which you need to lower any vacancy fear.Y ou could look at investing into commercial sized complexes where the value reflects the income instead of sales comps. 

Take a look at the maps and look at the individual addresses that were used as a basis, as a rent comp in another section of town that may not be applicable could dramatically raise or lower the rents given. 

And the interest rate is a hair lower for the same cost. 

Lowering the price that much means you missed the mark on your comps.

This was gross incompetence on so many levels and now it’s value is drastically lower .

But, since we've had incredibly low inventory recently, and the number of homes on the market now is still lower than it was in 2012-2014 in this same time frame, AND the fact that jobs are still being created here (Google and Apple building new campuses for example), I think a slow-down is still a ways off.

According to him we may have a leg up because the decision was based on them being "model tenants", and that no longer applies.