Yeah, I ran into that before, Non-OO is always capped at 2% from what I've read(and run into).

Of the bat my cap rate would be 14% but there are some minor repairs probably around $2000 but I would't repair until the tenants leave.

They actually "cap" the ACV based on a metric they use.

so far I've found that I need to divide net income over cap rate or something like that.

Even with a cap rate of ten percent, you may find a lender who would provide $125K in new financing.

hi marc hope this answers your question roll roofing is always ok and its actually supposed to be used when there is a little pitch when there is no pitch roll roofing is also required but it has to be smooth no granulated torch or hot work must be a Peal in stick base and cap smooth then when you get to pitch roofs only up to a 3 12 pitch could you roll horizontally any thing great from 4 12 to 8 12 must be rolled vertically or as what some people call strapped any thing greater then 8 12 must either be 6 nailed shingle and felt strapped or standing seam metal

There is also the issue of the "10 property cap" that you'll run into.

~~~~~~~~~~~~~SFH - 4BR/1.5B - 1300sqftPurchased for $49900 (30 fixed - 20% down) [rentable condition as-is]Rent Comparable - $1150/month10% property management8% vacancy15% repair/maintenance$400 insurance$2300 taxes$5k rehabEstimated Cash Flow - $358/month pre-taxEstimated Cap Rate - 13%Estimated Cash-On-Cash Return - 17% (includes estimated down payment, closing costs, reserves, llc formation, rehab)Estimated Full ROI - $23% (tax write-offs, mortgage pay-down)There is probably some captured equity in there too.

Cap Rate?

@Dan...I'm fairly new at investing as well. 20+ Cap Rate=Good Deal in my book.