So if you can't qualify at first, and have to carry for a year - how does that look on your financial figuring?

@Carrie Giordano  Yes, we do! 

That's a 1% rental you won't make money if you carry a mortgage.

I doubt a tenant that intends to sue will care whether you carry a mortgage or not.  

I recently heard a story about a Real Estate Agent going to check out a duplex for a client and he was told to leave after a man carrying a gun said to leave the neighborhood.

@Carrie HerrmannI'm not an advertising expert, but you should do whatever your competition isn't doing.

You would also want your tenants to carry "Renters" insurance and list you as the additional interest on that policy.If you will not be occupying it right away and the duplex will in fact still be tenant occupied on both sides, then you need a landlord policy. 

Tell him you could offer him FMV for his home if he is willing to carry a note.

We sold a property like that early this year, the buyer put down 10k and we carried the note for 35k.  

This is not the only money you will need, can't forget about closing costs, carrying costs, and rehab costs when formulating what is and is not a feasible plan of attack on an investment.Like I said Cap Rate does not really apply to anything smaller than a fourplex, people bend the rules and like to use it as a shortcut for figuring out value, however small multifamily and SFH fall under a different valuation generally.