I definitely don't plan to pay the asking price I'm going to ask 25k lower.

Then I have an appraisal conducted with a floor plan that dictates a full build-out of the same space to create offices with kitchenettes, bathrooms, storage closets, etc. then should the 2nd appraisal still reflect a 9.0% cap rate or can the cap rate be lowered by the build-out?

People post ads on CL claiming to be renting out the property and take advantage of renters' excitement of lower deposit/monthly rent. 

A 20 year initial lease on a business that is growing in an industry that will only get bigger with a strong lease guaranty would have a significantly lower cap rate than a 10 year lease with a struggling company you're looking to turn around.That being said... as I started: I don't believe you are being unfair.

They can also range from the simple (like a straight 50/50 split) to the complex (a preferred return with several waterfall hurdles and other oddball provisions).For typical Multifamily value-add offerings terms should be somewhere similar to the one we typically use:8% preferred return (investor gets 100% until reaching the 8%) then70% of the profits until reaching a 12% return, then60% of the profits until reaching a 15% return, then50% of the profits thereafterThese can slide around somewhat, with slightly higher or lower preferred return, and/or the % profit splits might vary (such as 10% higher or lower than above) or the hurdle rates can vary. 

I feel he’s full of bs.I explained to him that he signed a one year lease and that we’ve never had noise issues/complaints before but that I will ask the other tenant (who has lived in his unit for years with zero complaints from anyone about noise) to keep his TV lowered after a certain hour.There is a clause in my lease that says he will have to pay 3 months rent if he needs to terminate the lease early.

On the other hand if you buy 4-4plex buildings (perhaps all located right next to each other) you can use residential financing, a little bit lower interest rate, 30 year amortization, and no balloon.

(if the rent they are paying is not too much lower than market value).  

You are better off with a lower as is offer

In 2008, I noticed that his area did not really take any major hit to home price, maybe stayed same or bit lower, during the recession that hit silicon valley.