Arlington itself and most of Arlington County even before Amazon has become extremely expensive; its difficult to find a good deal and when you do you need to have a good amount of capital and act quickly. 

Now that is an EXTREME circumstance and he got such a good deal on the property that he'll still make money when it's all said and done but if the bank or a HML gets burned by that once I promise they won't be lending on occupied properties again.As far as due-diligence goes the bank will need to deliver a clean and marketable title to you.

@Nicholas UrcuioliFirst of all you wouldn’t value a three unit building based on Cape Rate.Four units and under are considered residential and you would use the price comparison approach on an appraisal.Cap Rate is purely a measure of risk and never a measure of your actual cash on cash returns or future gross profitPlaces like San Francisco Los Angeles and Manhattan have way more renters (demand)  then there are vacant units (supply).This makes these markets extremely safe because the risk of the whole building becoming vacant is almost 0Markets with higher Rates like Ohio or Alabama must pay a higher return on investment because they are riskier markets with much higher vacancy rates and demand and Manhattan have way more renters parenthesedemand

Getting cold feet and not sure if I should back out.

Getting cold feet and not sure if I should back out.

Sure, some people make a killing off of low-end rentals but it is extremely time intensive and you would need to have your systems/processes firmly in place.

I have used USAA for years and have been extremely happy with them, but am wondering if another bank may be better for real estate transactions/investment funds.

The house could have fire damage and is completely gutted, or it just needs some paint (the extremes). 

The market does not produce cash flow, it does not have extremely cheap leverage, and it does not have enormous tax advantages.

@Tim Jacob apologies for the extremely late follow up.