This was not bought initially as an investment but seeing what the home could bring in the area its in made us very confident in it's future ability to give us a return.

I was thinking more from a market research perspective, initial due diligence.

Now that I've subtracted it, the Cap rate is no longer enticing, it shows about 5% and Cash flow/Initial investment is 4%.

Hi Jacob, Having a few initial screening metrics can help filter and vet potential markets.

In my mind, this will make it difficult for me to make a case of keeping their initial deposit if the unit is trashed.My thoughts were to slightly increase rents 3% - 5% and have them complete a conditions report prior to renewing a 1-year lease.

The loan requires that a GC give an initial bid for the work and then also sign off at the end that the work was done satisfactorily.

Usually it's a hybrid product with an initial 10 year interest only period and then a 30 year fixed from there.

My initial focus has been on single family rentals in Kirkland with the hope of expanding to small multi family in the future. 

Meaning, if you take an initial loan upfront, you will have it appraised for the renovation loan (so you know the value), you can roll in all the costs (that is, as long as the value is there), and it limits your risk.  

Cash on Cash - this is your cash flow divided by the initial cash invested (downpayment, repairs, closing costs, etc.) c.