The price and value add opportunity is important at that size of purchase. dont trust pro formas from the marketing who claim properties are turnkey

Of course, with all things, the answers to all these matters will depend on the circumstances.California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts.

Monthly data through June 2022 for MA in total shows a very strong cyclical market.

Purchase price: $280,000Down payment 20% ($70,000)Once inputted into the calculator this is what it spits out:Monthly income:   $2,375.00Monthly expense: $1,989.10Cash Flow:             $385.90Pro Forma & Purchase Cap Rate:               $5.95%NOI:                        $16,661.70Cash On Cash ROI: 6.34%Seeing if by the looks of this, this is a good one or are we missing something? 

On the other hand, as a buyer, you should either factor it into the NOI, or at very least, include it in your pro-forma analysis.The funny thing is, I once asked an appraiser if -- when valuing a property from an income perspective -- they factor in Capex Reserves or not, he said that for commercial properties there is no appraisal standard to do it one way or the other.

Sellers / brokers, intentionally or not, misrepresent their expenses, over-inflate their income and get words and phrases like "actual" "pro forma" and "made the hell up" confused.Once I've seen the P&Ls, I'm not interested in cap rate anymore when comparing investments, so for me, I don't find it useful pre-offer, pre-contract, post-contract or post-close.Nevertheless, as an investor, you need to know what it is because everyone "uses" it and as a negotiating tool, it can be a good one, especially if you understand it better than the other guy.

Depending on the answers to these questions is how you would form a strategy with the owner.I know that a lot of indoor grow equipment can be expensive, but yes, you have to consider depreciation if you are going to put a value on his equipment.

A two paragraph response form a guy who knows nothing of the software and does not answer the question.  

This is like my seller questionnaire form as it keeps track of asking price, reason for selling, is the house listed and more.  

Here are the numbers for a 4plex in Raytown MO (Suburb of KC).Purchase price: 200KRepair/Rehab Costs: 10K ARV: 210KFinancing with 25% down at 4.5% for 30 years (150K Loan)Total Cash needed $65,806 (Down payment+Rehab+ClosingCosts)Monthly Income $2375, Monthly Expenses $1939.86 with NOI $14342.00Expenses (Vacancy 7%, CapEx 5%, PM 8%, Tax 6%, Repairs 11%, Insurance 7%, Snow/lawn 6%)Cash Flow $435.14CoC: 7.93%, Pro Forma Cap: 6.83%, Purchase Cap 7.17%All numbers were taken from BP calculator and my estimates are based off of last years figures because the apt is fully tenanted.My concern is the CoC and Cap rate seem low for a C Neighborhood and my initial cash outlay also seems high.