But as you're now realizing, they'll be harder to find, because you'll be competing against owner-occupiers (ie. emotionally attached, getting lower interest rate, so will pay more) in those markets.Always keep in mind though that a pro forma cap of 6% for residential property will NOT assure you of a good "deal".Rule of thumb: WHATEVER the market value is carefully worked out to be, offer no more than 70%, maximum!...

should I go ahead and form a LLC?

I would really look to form a strong relationship with an agent who works with investors that really knows the areas--probably your best bet.

@James Chambers : obvious question: did you base your numbers on a pro-forma given to you by the seller/broker?

A couple friends and I were putting around 5k-6k each towards two properties as our first Real Estate investment (non-primary residency). I have the best credit score of the three, so I will likely be the one to secur...

Doing pro-formas for the 1st time takes way longer than for the 100th.

But you should be trying to pre-qualify with a bank so you know the interest rate for various mortgage scenarios into your pro-forma.  

In the old days you built a park and a MH dealer would fill it with models  and then sell those units in place.but with todays land prices and prices to develop the absorption is simply to slow to make them financially viable.. 250 spaced could take 10 plus years to fill.Financing for MH in parks is not what it used to be either. and cities basically do not like them either form a land planning standpointunless your going to develop with cash there is no financing either for this.

Last thing is to ALWAYS only offer based on ACTUALS, not pro forma.  

Once rehabbed, the 5 vacant units will bring this up to pro-forma 25% cap rate based on the above purchase price.