Depending on how bad it is, I would anticipate higher vacancy and possible decrease in rents.  

Condos will have high monthly association fees and you want to make sure you are accounting for insurance, vacancies, repairs, etc.  

season vacancies.- keep in mind that things like spices, towels, sheets, tp, paper towels, propane for bbq's, cleaning supplies, coffee filters, soap, have to be kept up to date, clean and refilled when you have weekly renters. 

You might be able to build a garage for that price around here.I wouldn't worry about the CAP rate ... if the rent schedule; operating cost inputs; and allowances (vacancy, maintenance) are correct (known values) or realistic (allowances), the NOI should speak for itself.   

Vacancies cost money and take time to fill.

there is risk involved, like paying for repairs and capitol expenses, and vacancies when the renter moves out. 

You need to have these in place before buying because there are going to be roofs to repair, Hvac to replace, a bad tenant, a prolonged vacancy etc

Also, if their credit is really good and they don't owe anyone anything, they will probably buy a house of their own in the near future and you will have a vacancy.

I can already tell you the vacancy answer: "Not long as they're easy to rent" or "I'm just keeping it vacant to show". 

That has me worried about my prospects of getting good cashflow with little vacancy in this area for what would be my first property.