May plan is to pay cash and wait until interest rate improves, then refinance and pull out $150k for a down payment on a second property. 

The prime rate now is at 8 ½%.

If your friend just wants to be the bank and park his money for a guaranteed rate of return then I think 10% is fair and pay it like a dividend. 

While evaluating potential investment properties these past few weeks, I have realized that the average rent in Austin is comparatively lower and due to high interest rates and property tax, the outcome is mostly negative cash flow. 

I'm assuming that with your hard money interest rate will make that a pretty high monthly bill.

All 3 units were occupied very quickly and the property is now cashflowing above our projections with vacancy rate (so far) below what we expected!

Marie is an old city with a high vacancy rate, declining population, poor tenant quality, and will never see any meaningful appreciation.

Our broker mentioned that the average interest rate is 7.5-9% and they have never seen the rates drop below 7%.

The only downside to these is they are typically higher interest rates and shorter terms. 

After doing this, I then run the property through Airdna.co and/or Mashvisor.com  Both of these tools will give you projections of what type of rental rates, price per night, bookings, occupancy, seasonal variations, etc.