Cap rate is more a function of risk versus how the cash flow will actually perform when you are looking at broker pro formas. 

@Brady BoyerThe showing request form as mentioned below is a great way to weed out unqualified & uninterested candidates.

also I realize I left out taxes they are 190/month Casey,Based on a crude pro-forma it appears to.

We don't want to form an LLC because of the high cost, but do we still need to form a partnership entity with the state of CA.

Now we decided to form a LLC for asset protection?

The good thing about this is that I can sell one off if I want to later but for now I have to get 2 of everything.Here is the deal just for one unit (the details are the same for both):Purchase price: $95,000No repairs needed (current owner is taking care of the big things found in the inspection)Current tenant pays $925/monthAssuming 5% vacancy and CapExAssuming 8% repairsInsurance is $95/monthTaxes are $153/monthWith a conventional loan of 25% down and a rate of 4.38% here is what the calculator gives me:NOI: $6,128.48Monthly Cash Flow: $154.97Total Cash Needed: $28,590COC ROI: 6.5%Pro Forma Cap: 6.14%Purchase Cap: 6.45%50% rule monthly cash flow: $106.76Income-Expense Ratio (2% Rule): 0.93%Total Initial Equity: $23,750.00Gross Rent Multiplier: 8.56Debt Coverage Ratio: 1.44%Is this a good deal?

I haven't seen any pro formas for MFH in my area and am not sure what my area's cap rate is so this is a bit of an unknown.

The pro forma states that the rent is currently at 775.

So far my wife and I have accumulated 5 properties in the Baltimore 21213 and all properties are rented.Our next step in our 5 year plan up to now was to procure a portfolio loan form a smaller bank.

I am looking at a rental pro forma for a 230 unit building and they are using 5% vacancy and 30% Operating Expenses & Reserves.