Like anything else , I’m sure there are exceptions to these assumptions and will be curious to see what other BPers have to say.

Could be the numbers are estimated based on assumptions rather than actual results2.

My assumption is those units will take anywhere from an additional 24-36 months to complete so slightly over a 3 year plan but once complete I can assess cashflow on the bigger apartment and determine if it will make sense to sell off my current units and pay a hefty amount down on the note or if I will have to do another value add complex to hit my cash flow goal. 

It sounds like a costly transition that would take a long time to recapture, but that is just an assumption, an analysis would tell the story.

A quick way to gauge cap rate is to see what others have sold around your area - make assumptions based on occupancy and rent rent to get a full gross income picture.

You also need to look at the comps as well to validate your assumptions.

It's basically one big math problem where you have to use assumptions (like how long it will take you to rehab the home, how much will it cost, etc) to come up with an answer.

This is something I didn't factor into since my assumption will be the renter will cover HOA fee on top of rental rate.

Much of the information you posted is not correct. 5%, wrong, multiple offers, most of the reo systems send out an automated email when that happens, in many states closing costs on reos are actually higher as transfer taxes arnt shared.So with many of your incorrect assumptions, its hard to tell if the things you agent said that are incorrect were actually told to you or if its coming through filtered through.In the future however, consider using an agent thays good with lots of experience instead of a buddy.

When we are underwriting deals we can plan for a downturn in our assumptions e.g. increase expected vacancy and decrease rents to avoid overpaying10.