It's a legitimate 7%+ Cap and will produce 10% COC with current rents, not proforma. 

I thought the timing was great, because I had just found a great deal that produced a $40,000 net Buy and Flip strategy, or just house hack it for 1 year,so we  go to try to Find the money to finance the project and we were Denied.

If they are the ones making the offers they are incentivized to tweak their Zestimate algorithms to produce lower numbers.I realize Zestimates are not always accurate or a good measure of home value, but there are many people out there that put a lot of stock in them.Would you hire a home appraiser that made cash offers on every home he or she appraised?

Does the extra money you will produce with an STR adequately make up for your time involvement to justify going that route in your situation?  

It would produce appx $2600 in income when fully rented.

I think a lot of these "investors" are just trying to park cash in a safer income-producing asset than the stock market and many of them won't be keeping up with maintenance or won't be forcing appreciation with rehabs, etc, and the deals will be coming. 

I get it, the cost to borrow money is cheap and many people are thinking the same as we are, Tangible/income producing assets.

Another infrastructure situation to be aware of would be to see what the well is currently producing to see how many additional wells you would need, there are regulations regarding the well yield and how many homes can be serviced.  

Those who produce values--including real estate investors should not be regarded as objects of disgust.

I ask because at the moment, and as Joseph eluded to, with how little inventory there is to purchase here coupled with the massive (and still growing) demand for housing both on the investment and retail side, solid deals that will produce good cash flow are fewer and farther between and so heavily sought after that when they go to a multiple offer situations the margins dry up pretty quickly.