Since there is so little that needs to be supplied, I would be very happy to cap off the circuits to the basement and hallway and the front porch light, and simply put in motion detector battery operated lighting in these areas, and tell the tenant to use the hookups in her kitchen, and get out of the basement.  

I just have no interest into buying into a 5-6 cap property.  

When running numbers to figure cap rate do you include percentages for vacancy and repairs into your NOI?

Purchase Price 180, 4 family built in early 1900'sRoof, heating, electric all updated in last 5 years, replacement windows and vinyl sidingOff street parking, dead end street c+ b- area30/yr mtg 4.65% about 6k in closing costsAnnual income including coin op roughly 39kUsing 10% for repairs/mait, 5% cap ex, 8% gross rents for prop management, taxes, accounting, lawn/snow, trash, utilities etc....noi is about 14kCFBT is about 6200kI like to get about 200 per unit per month on a 4 fam which i would be able to if not for prop mgmt fee so I'm thinking this is a decent dealThoughts?

Should the cap rate be a part of my analysis and if so, how is the best way to think about it in my market in metro-St.

When it comes in contact with your ballcap, take hold of the cap and turn it around on your head, so that the brim of the cap is facing FORWARD.Good luck!

So at your offer price, that would be a cap rate around 7.5-8%.With an interest rate of 6.5% on the loan, I don't see much of a safety margin.  

I tried to be conservative.Purchase Price: $45,000.00Purchase Closing Costs: $3,000.00Estimated Repair Costs: $5,000.00Total Cost of Project: $53,000.00After Repair Value $50,000.00Down Payment: $9,000.00 Loan Amount: $36,000.00 Amortized Over: 30 years Loan Interest Rate: 5.00% Monthly P&I:$193.26Rent $700.00 Total Income $700.00 Vacancy $70.00CapEx $70.00Property Taxes $51.08  Repairs  $70.00P&I 193.26Total expenses $454.34 Monthly Income: $700.00Monthly Expenses: $454.34 Monthly Cash Flow: $245.66 Pro Forma Cap Rate: 9.94% Purchase Cap Rate 11.70% NOI $5,267.00Total Cash Needed $17,000.00Cash on Cash ROI 17.34%   

If they pay water etc. take gross scheduled rents and knock off 60% expenses.91,020 X .40 = 36,408 NOI10 cap  364,080 sales price with no additional deferred issues. 3 5 units you are dependent on surrounding buildings and how they are run versus owning a whole complex.I will not even go into the additional steps as this property is overpriced junk.At the sellers sales price it is almost a true 5 cap for low end rentals per door and write down repairs needed to other units and likely a 4 cap.

For instance, I've talked to one guy in particular from loopnet who advertises 25% cap rate and then on the phone he's sort of like "well.. you know... it's more like 18%"  Don't get me wrong, 18% cap rate is amazing, but why lie about something so fundamental on loopnet then tell me something else on the phone?