Then I have an appraisal conducted with a floor plan that dictates a full build-out of the same space to create offices with kitchenettes, bathrooms, storage closets, etc. then should the 2nd appraisal still reflect a 9.0% cap rate or can the cap rate be lowered by the build-out?

People post ads on CL claiming to be renting out the property and take advantage of renters' excitement of lower deposit/monthly rent. 

A 20 year initial lease on a business that is growing in an industry that will only get bigger with a strong lease guaranty would have a significantly lower cap rate than a 10 year lease with a struggling company you're looking to turn around.That being said... as I started: I don't believe you are being unfair.

They can also range from the simple (like a straight 50/50 split) to the complex (a preferred return with several waterfall hurdles and other oddball provisions).For typical Multifamily value-add offerings terms should be somewhere similar to the one we typically use:8% preferred return (investor gets 100% until reaching the 8%) then70% of the profits until reaching a 12% return, then60% of the profits until reaching a 15% return, then50% of the profits thereafterThese can slide around somewhat, with slightly higher or lower preferred return, and/or the % profit splits might vary (such as 10% higher or lower than above) or the hurdle rates can vary. 

I feel he’s full of bs.I explained to him that he signed a one year lease and that we’ve never had noise issues/complaints before but that I will ask the other tenant (who has lived in his unit for years with zero complaints from anyone about noise) to keep his TV lowered after a certain hour.There is a clause in my lease that says he will have to pay 3 months rent if he needs to terminate the lease early.

On the other hand if you buy 4-4plex buildings (perhaps all located right next to each other) you can use residential financing, a little bit lower interest rate, 30 year amortization, and no balloon.

(if the rent they are paying is not too much lower than market value).  

You are better off with a lower as is offer

In 2008, I noticed that his area did not really take any major hit to home price, maybe stayed same or bit lower, during the recession that hit silicon valley.

In addition, higher costs of living will continue to drive the population to lower tax states.This is really starting to make me consider investing out of state.Looking for some investor input.Thank you