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.

I'm also recommending that all my clients invest in multi units as opposed to SFR's to minimize the impact of vacancy, if that were to happen, given how low most cap rates are these days.

It's not difficult to do, but would just be ideal if all the communications (including FPI letters) came from the servicer..

Are we making homeownership more difficult for middle class people to achieve?

Are you setting money aside for repairs/maintenance, vacancies, and cap-ex?

- mortgage, utilities, maintenance, cap ex, etc. 

I met with a realtor today to go over a portfolio that someone was selling off in our area, we definitely cant bite off the entire portfolio for a first deal, So for our first investment to kick start our future, we were very interested in only the 5 duplexes listed at $1 mill, to get close to an 8 cap with good cashflow we would have to offer around $600k and $500k was where we wanted to be after using the BP calc.