Yes, cap rates are extremely lower compared to other states such as AZ, MD, NC, etc, but value-add/building equity is much more significant.

You’ll pay about $10-12k in closing costs, which leaves maybe a $65k gain which is only another $10k in cap gains and 2 years of depreciation recapture at 25% (almost nothing.).

But the CAP rate might not be as high as using it as the down payment option.

I am going to cap at some point as I already have a primary residence mortgage.

Its currently owned by a non profit and they have indoor climate controlled storage units in place and rented, a store front with tenant in place, a vacant and gutted second floor that could be finished and rented (probably about 2000-2500sqft) and a banquet hall with full kitchen and bar that has a max cap.

@Dax Squillante  Using your numbers (which I would be very surprised if you can keep your costs that low), your breaking even with zero cap ex reserves (one piece of equipment needing to be replaced like an AC system, furnace, refrigerator, etc, would put you at a loss for quite a while).  

Once completed I should cash flow $600 after all expenses and cap ex given the projected rate of expense increase.

Once completed I should cash flow $600 after all expenses and cap ex given the projected rate of expense increase.

If a new deal is significantly higher cash flow it could be worth taking the closing cost and cap gains hit to upgrade the cash flow. 

I just thought 10 was the cap where traditional lending because more difficult.