It was listed at $122,900 last week, and they recently dropped the price to $112,900.

The person had a loan modification a year ago but it does not give the rate you would have to contact the seller if you read thru the note details you will find the information If it is a 15 year term it would be about 9.20% interest you  would make about $80 a month interest for the first few years then it would drop  Seller Comments:Entered into modification a year ago.

Is there a general rule of thumb for the turnkey property and its associated drop in cap rate? 

@NateWilson For some education check out the Education drop-down above and go to Guides and check out the Ultimate Beginners Guide and then go to the Free Course tab under Education too.

On the other hand, if the tanking economy causes my property values to drop, what then?  

As I do not have much of any commercial real estate experience, its good to get the input from those which know this market and know the key 'pinch points' for evaluating a mixed use property like this one.I obviously let this one alone, however the property remains on the market and most recently dropped $200K; Cap Rate has now improved to 7% with 3% total vacancy loss; 6.5% with a 10% vacancy loss.

You already know you're buying into a problem that another created and they're now anxious to drop the problem in the lap of an new investor....DO NOT TAKE THE BAIT UNLESS AND UNTIL YOU'VE RECEIVED PROPER LEGAL COUNSEL!

Just curious - after your marketing campaign drops and you're talking with prospective single family sellers on the first call, what are your top, must ask questions ?

(Room size 12 x 12)-Bathroom is pretty simple, ( ceiling only 6 x10) 2-4 hours ($60-$120)-Kitchen ( room size 14 x16)-Drop ceiling 6-10 hours 2 gallons $50-Walls 3-6 hours 1 gallon $40-cabinets 30-40 hours 2 gallons $100-kitchen 39-56 hours ($1,170-$1,680)Materials around $200I'll estimate 75-110 hours ($2,250-$3,300)And materials at around $700So remember I can do as much or as little repair as you want me to do.

We are at a place where probability indicates interest rates only have one direction to go {thought the BoC surprised us twice last year with to 0.15% drops in the overnight rate}.