Usually, DSCR cash-out refinances are calculated based on a percentage of market value, usually around 75% LTV.

When you guys are pricing your rent based on accepting housing vouchers, are you always marketing it based on what the fair market rent is per HUD? 

I am based in Los Angeles and have had luck with this BP tool. 

I am the owner/operator of a private lending/hard money lending company based in Knoxville in conjunction with our local family office.

If after that deduction, and all other deductions you still have cash flow, which is unlikely, it is a candidate for hold however based on your description of the handy work I would guess it to be a maintenance pig that you would be safer to unload now and move on to other endeavors that will have a better chance of being positive cash flow. 

It appears the units are below market, however with some cosmetic repairs and perhaps some capex's I feel I could increase the rent by at minimum (based on local comps) 68%.I would offer 85% of list and estimated $20,000 in repairs/upgrades (this is probably a generous estimate - the property appears to be in good shape, basically needs a face lift).With all these figures, including the 50% rule, financing with 20% down @ 3.5%, I come out to a profit of $262 per unit and a cash-on-cash return of 9.53%.So, does this seems reasonable?

Based on information I've seen, it looks as thought the market might ease up a bit in the latter part of the year and there will be more inventory out there.

Do some investors buy sight unseen based on cap rates?

Based on all your inputs I'm definitely going to walk away but I appreciate everyone thoughts and advice.

I don't know all of the particulars of your situation, but based on a couple of possible scenarios, here are some suggestions:  1.