yes 3%.why would you get involved for that type of returns??? 

We have a sfh (former primary residence) grossing $425/month and with over $140k equity (15 years in possession) and I am finding multi family homes in same area for slightly higher monthly cash flow with long term greater return because of having more than one property to rent.

When I try to figure out the "Internal Rate of Return, Before Tax", however, my answers are WAY off.Would someone who has read this book PLEASE help me understand how Mr.

If you are taking the money as a distribution it should show up on your income tax returns. 

Depending on your investment threshold, calculate a high single digit or double digit Cash on Cash return.

However @Richard Balsam is correct about insurance and everything, getting the rent that is due is a great return, getting them to pay for everything else might be possible but will make everything much harder.

We turned our first home into a rental and the property has around 200k in equity and the return is 9%. 

If so it might be worth trying to find an equity partner who would be OK with a preferred equity return on their down payment. 

Your calculations look pretty good, if you are comfortable with the return you should be alright

If I treat the 401k money as if it were cash, that is a 16% return.