Also, we predict that this house will continue to appreciate in value over the years.  

You can form an LLC as you are in the process of buying the property, just make the realtor know and the lawyers office or title co. know that it will be under an llc when you close, and provide them the information before the closing. some banks will lend to llc's, if its a buy and hold, show them all the financials and predictions that the property will make money and you will be able to pay them ( go in with something from your CPA or financial adviser showing your net worth too) right now i have 3 properties under their own llc, waiting for realtor to send paper work to sign for 4th as i type this. some people here will put each under their own, some will have an LLC that has as many as 5 houses before they form another llc. so you will get mixed answers on this. the house i am buying now will be a flip, so i will form a llc-s corporation for this one and future flips. but have been thinking of creating a parent LLC for my holds.

Accreditation is achieved by either proving the investor has a net worth of $1,000,000 not including primary residence; by proving that the investor has made $200,000 a year over the past 2 years, with a reasonable prediction to make that again this year; or by a letter of accreditation by a CPA, attorney, or other professional.  

My concern with this is it is hard to predict future value of property and I don't want to invest based on an assumption of appreciation.

And hey, they are predicting a mild winter this year anyway :)

Tenant build-out cost.Lastly, you really should be looking a deal over a 3 - 5 year period of time and not only the cap rate which is just a snapshot in time and predicts one year ROI. 

With 20, things will likely average out and you are more likely to hit the "average" vacancy rate (which can be predicted).

Here's a very interesting article that predicts massive job losses in 2009 will cause housing prices to continue to decline.

Lots of "experts" didn't predict the last crash or the upswing...and others blindly followed their "expert" opinions.

So, be conservative, then you can be pleasantly surprised when results are better than such predictions!