Each payment received will be part interest, part them getting their cost basis back and part cap gain.I have an old seller I'm working on, too.

Lower CAP here as it's a higher end area and building.  

@James Denon, VERY difficult to get done, but possible. 

@Peter PalmerTampa market is competitive, but you can consistently get 15-20% CAP on triplexes, duplexes, and SFH rentals here.

We have an extremely diverse array of positive economic drivers that yield stability AND growth, and virtually no permits to build units that rent from $650-$1000/mo.... keep in mind, we're still able to find 7 and 8 caps, with value add potential due to below market rents. 

Can you really cash flow buying at todays compressed cap rates  with 15 yr ams above 7.25%?

Here in San Diego I’ve seen projected financials that yield a 4-cap.

I invest in an area where it seems that cap rates are compressing. 

To give solid advice the community will likely need more information, (where you want the vacation rental, how much you think you want to pay, any questions/ concerns you have) It is difficult to give advice with no supporting information. 

Cap rate somewhere around 8.5 and cash on cash 16.5% Better than most 401K returns.