You can calculate a cap rate on anything that produces NOI but it would not help much in determining whether it's a good investment.

My SO and I are having an incredibly hard time finding a lender in NYC who offers FHA construction-to-perm loans.

By cost I mean properties that don't appreciate relative to the overall national market, expensive marketing to produce such deals or even increased risk by investing out of state.

However a different perspective of smart is one that produces the best ROI.  

Hi @Tory Kelliher , I am fairly new to RE investing as well and I have found BP incredibly helpful in providing online training, helpful references and in general a very powerful network to share ideas or just read and learn of creative methods other members have adopted to be successful in their market. 

No idea how "friendly" she is, but Anita Boyd did my last deal and she was incredible.

I wish I had done this when I was looking for my first home, and if done correctly you can set yourself up with a producing asset that can help guide you along your overall real estate goals!

There are separate entrances, and it would be incredibly easy to reformat the floor plan to make this home an up/down duplex without doing too much to alter the current lay out.Does anyone have experience with the city with this process?

Based on the current prices you will have a hard time finding much that will produce cash flow.

Base the value on the actual rent that the property currently produces.