I'm sure there isn't an exact formula and it depends on the area and other factors, but if there are rough rules that people follow it would be helpful for me to hear them.Lastly, the cash flow on this property isn't going to be much (after setting aside 5/5/5 for vacancy, repair, and cap expenditures) until I am able to bring the rents up to market rate, so I will be managing this property myself.

How do you get started in developing the contacts and network for these type of projects?

Any SJ buyer is factoring appreciation into their math, even if you don't.

We would love to be near Carlson Park but we are priced out and any chance for a rehab seems to be scooped up by commercial developers.  

I also went to undergraduate in PA and grad school in AZ, and in both locations large apartment complexes were being built, and the local landlords couldn't compete in one location because of over development by the large corporations.  

First, your methodology above doesn't factor in the amount of time/effort you and your other money partner put into the job.  

As to "(if) we don't run out of water" I'm betting that one of two things will happen sometime in the future, 1) it will be decided to pipe the Columbia river from Washington the way oil is currently being piped across continents, or 2) a process will be developed to desalinate seawater cheaply or a process will be developed to bring moisture out of the air which can currently be done on a small scale.

@Robert Adams dunno really, maybe I'm spoiled back from my days of buying in 2012 or 2014 but it seems hard to find things that Cashflow slightly positive (to have reserves for CapEx improvements) when having to factor in Mortgage P&I also.

Never understood why this area developed the way it did.

Agreed, these guys have assembled a few adjoining parcels and are looking to develop some time in the future.