Otherwise, I'd say watch those areas closer to Micron understanding the barrier to entry will be significantly higher in exchange for the lower risk.

House gets foreclosed on when a borrower is not paying its debt obligations - typically its mortgage.buying foreclosures is not for the faint of heart as you have no idea of the interior of these properties lastly while it can be beneficial also realize if there are a lot in an area those homes are the new comps when trying to sell so it lowers home values in an area 

Instead of 40 houses cash flowing $200 each or $8000/month, you buy 10 houses and pay them off for a cash flow of $10,000/month with 1/4th the headache.People don't understand the amount of time, energy, and stress involved with managing a lot of doors, especially if they are lower-class properties typically needed to generate cash flow.

Appraisers are using MLS data and often it is lower than actual rents. 

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

This implies residential units can be built at lower costs and provide better return. 11) adding an ADU to SFH can make the SFH fall under rent control.

I tried calculating value based on NOI and cap rate (see below) but I'm new to this and the value seems to come out lower than I would expect.

You can use the "bad roof" or other problem to negotiate a lower purchase price. 

In this scenario, the higher pref and lower splits only come from the GP side.  

The numbers may be 30-40% lower than today's cost, but the process/approach to estimating may be good for you to review.