You can also buy in cash and refinance out in a couple years when rates (in theory) go down.

Plan on 1031ing into it purchase price of 11m with about 3.5. down. 8% cap rate @ a 6% rate. 

Then you could buy now before competition becomes crazy again and refinance when rates come down.

Then you could buy now before competition becomes crazy again and refinance when rates come down.3.

Bad publicity and ratings will cost them a lot more than a plumbing repair

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%.

And if you want to save even more you can search for used online (ebay, craigslist etc) I use Alert One (you can google them, they are on Rising Sun ave.) for annual certification in my buildings but use my electrician to update, install or replace the alarms.

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. 

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.