If we were to rent out the front house that we currently live in, I would estimate it to be about $3500 or more for it, since it was remodeled, and it looks great.Analysis:So I did the math (high level) using 2 different scenarios.Scenario 1: If both the houses were rented.Property/Deal ProfileGeneral GuidelinesPurchase Price700,0001 Percent Rule (%)0.857142857Down Payment (%)3.50%50 Percent Rule3000Down Payment ($)24500Cap Rate8.214857143Interest4%Cash-on-Cash Return26.73744578Term (years)30Loan amount687,321IncomeCash FlowRental Income 12500Total Monthly Income6000Rental Income 23500Total Monthly Expenses5075.33Laundry IncomeStorage IncomeMisc IncomeTotal Monthly Cash Flow924.67Total Monthly Income6,000Total Annual Cash Flow11096.04ExpensesCash-on-Cash ReturnTaxes750Down Payment24500Insurance58Closing Costs0Water/SewerRehab Budget30000GarbageMisc Other-13000ElectricGasTotal Investment41500HOA FeesLawn/SnowVacancy200Repairs200CapExProperty Mgmt.Mortgage Insurance Premium586.33Mortgage3281Total Monthly Expenses5,075.33Cash-on-Cash Return26.73744578 Based on the above analysis, here are the key takeaways – 1)The property cash flows - $924/month 2)Cash on cash return is 26% which is pretty good in LA I reckon.3)The main thing I would like to note is the solid Cap Rate of 8.2Scenario 2: The actual scenario with only one rental income since we moved into the front house.Property/Deal ProfileGeneral GuidelinesPurchase Price700,0001 Percent Rule (%)0.357142857Down Payment (%)3.50%50 Percent Rule1250Down Payment ($)24500Cap Rate2.214857143Interest4%Cash-on-Cash Return-74.46737349Term (years)30Loan Amount687321IncomeCash FlowRental Income 12500Total Monthly Income2500Rental Income 20Total Monthly Expenses5075.33Laundry IncomeStorage IncomeMisc IncomeTotal Monthly Cash Flow-2575.33Total Monthly Income2500Total Annual Cash Flow-30903.96ExpensesCash-on-Cash ReturnTaxes750Down Payment24500Insurance58Closing Costs0Water/SewerRehab Budget30000GarbageMisc Other-13000ElectricGasTotal Investment41500HOA FeesLawn/SnowVacancy200Repairs200CapExProperty Mgmt.Mortgage Insurance Premium586.33Mortgage3281Total Monthly Expenses5075.33Cash-on-Cash Return-74.46737349In the actual scenario, I am paying $2575 every month towards the house.

Tell them you will research comparable and give them a price within two days.

1. walk through inspection with them present to compare to move-in inspection and noticr of non-complaint behavior if any .

I reckon the only time a non-refundable deposit is not an outright scam is when the property is being sold as-is anyway, with no You-can-get-out-of-it clauses. 

Then, you can ask the realtor to look at comparable properties in the area to get the ARV or "after repair value" of the home.  

Instead of being valued compared to comps you be valued on NOI/CaP rate for the area.

What are the pros and cons of such deal versus a comparably sized and located investment in a classic multi family (...where you own the building and land directly).Any resources you guys have that I can educate myself on?

You can check Trulia, Zillow, Rentler and other sites to compare your house with rental homes in the area.  

From a psychological standpoint, I think it's easier to take a little increase every year compared to staying flat for a long time and then a big jump to try to catch back up to market, even if you end up paying less overall with the second option. 

I heard GRM is good metric to use and comparing sales to other duplexes that sold in that area.