I had heard mentioned before that it was something to do with their income producing capacity but also heard that that's not a factor until you're looking at 5 units.

Time is a factor.

After factoring in my Cost to Purchase of $4838....My cap rate is at 6.15% (I consider okay for NJ and condition of property), and my CoC is 4.74%!

This includes furniture rental, all set up and take down, and "professional quality interior design."

Factors I am not including?

<<==>>“If you don’t design your own life plan, chances are you’ll fall into someone else’s plan.

They take what they feel are comps and sort of average the price after adjusting for differences, then add a factor for excess or less Sq footage.So if 6 close comps sold for an average of $100K and averaged 1500 sq ft, all else equal, they would start at 100K then if the subject property was say 1650 ft they would add like $20-25 per foot for the additional 150 ft.

do what Bryan H. said, if you need to pay cash for something used delayed financing.I'm not sure if you can get a true HELOC on a rental property,,,they are more designed for your residence,,andy

I found that a thinner margin for a rock solid house makes better long term financial sense and has a much lower hassle factor.

There are lots of other things that might be factored in.Is there any common areas that you will have an electric bill?