In addition to the above, there is a $2500 down payment, is this a mandatory component for any deals or this can be something that we can give only we have got a good buyer waiting in line? 

I would use 10% until the property is inspected to determine the current condition of all major components and appliances.  

@Josh Sullivan Your greatest challenge will be where your weakest component is.

You did not include anything for CapEx (5% to 10%) depending on the current condition and life expectancy of all major components and appliances.  

@Harrison CookYour post kindles lots of questions.In the "good old-days" most heating systems were vastly oversized for the building they were heating - energy was relatively cheap, insulation was non-existant to poor ... so it was easier and safer to {drastically} oversize.Today, while energy {in North America}  is still relatively cheap for the moment,  we have a much better understanding of how to make buildings more efficient {though you might not think so looking at the construction industry in the U.S.A. and Canada}  and there are often more cost-effective measures than simply replacing an old, over-sized heating plant with a new, over-sized heating plant.You really need to - or at lease should -  perform a heat load analysis to properly size your heating system, a component of which, is determining the rate of heat loss of the building envelope.  

It's just not how the financial world looks at investments...CAP is a component of "commercial" residential multifamily...5+ units. 1-4 unit properties are often classified as single family (This is how Core Logic classifies 1-4 units)...The properties are valued by comparable sales method.

And it looks like from your numbers you are at about a breakeven cashflow right now, so I wouldn't recommend increasing your leverage anymore.There are two main components to your return - cash flow and appreciation. 

I copied this from a search on real estate ROE:Return on Equity (ROE) ratio calculates the amount of return generated in a particular year on the total amount of equity invested (or trapped) in a property.The amount invested (or denominator) is calculated as the initial investment (down payment) plus the entire increase in net property’s appreciation and the entire decrease in outstanding loan balance incurred prior to the year the ratio is being calculated.Cash-on-Cash Return is a similar calculation, but since the two draw backs of the traditional Cash-on-Cash Return are that property appreciation and principal debt payments are not factored into the formula, Return on Equity adds these two components to the traditional Cash-on-Cash Return calculation.A property’s net equity increase is calculated by determining what the “Net Sale Proceeds after Taxes” would be at the beginning of a year, and then again at the end of the year.

My Solo 401k has 2 components; a Traditional 401k bucket which is not tax-exempt and then a Roth 401k bucket which is tax-exempt. 

@Dan Roma You can have an agent list the property if you include that right in your contract (this is a major component of wholetailing).