When we built up the triplex, we set it up so that each of the 11 rooms can be rented out individually (all BR, except 2, have their own bathroom behind an electronically locked door).

Full stop.An investor can buy undervalued RE, do efficient improvements and create massive value. 

Often, traditional lenders offer better rates, which can significantly improve your profit margins.2.

It was suggested that we create an operational company that will lease rooms to individuals in recovery.

The plan was to pay cash, refi out and use that to improve the property. 

CAPs are an individual investor's measure of acceptable risk for a given reward.

For example, if you buy a home for 100k, and then improve the property and now it is worth 200k. 

Some of the easiest deals my dad did were taking a large piece of land and subdividing it into smaller pieces and then selling them off individually.

Some other other options to consider that may be easier, would be these: 1) Take your $840k and have a money manager at Vanguard, Fidelity or Schwab invest it in individual bonds at a 4-5% return. 

If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.DSCR lenders generally let you vest either individually or as an LLC.