We do not have enough single family homes in Houston to meet the demand being created by people moving here to fill all the jobs being created by our growing economy.

Should I not invest in this neighborhood if most are looking to buy, or does the lack of single family homes for rent mean that there may be a demand for them?

How will the owners feel about being partners with their tenants, who then might demand more rights/recognition than tenants might otherwise be entitled?

I might accept a B+ multi family in a great location with indicators of growth at a lower rate of return, whereas I would demand more from a C class in a less healthy area.

We have so many people moving here to fill jobs being created and no where near enough single family homes to keep up with the demand.

A formula is a very basic starting point but doesn't really apply to a specific property because location/condition/demand ect all have to be put in. 

Or unless it's a very hot market Avi, this property is in a very hot market with high demands for multi-family.

Only works in a high demand rental area, which is the kind you should be investing in anyhow IMO.

Each area has a different demand and the higher the demand the more people are willing to pay for that area. 

You can identify the two highest retail price ranges, in greatest demand, per zip code where you can list the rehabbed property.You can use the Realtor to help you find deals and also use Wholesalers.