It would be my first deal and I don't have a mortgage currently, so I've got traditional financing pre-approved at 4.8% with 25% down.Here's what my numbers are looking like:Mgmt fee:  $75 (going to manage myself)Maint: $50 (renovated in the last 3 years)Replacement reserve: $50Taxes: $113Insurance: $110 PI: $377 (assumes $95k purchase)Total:  $775 (not counting vacancy)My spreadsheets show a cap rate of 5.7% and COC of 3.49% with vacancy included.  

I have YET to see any one of them provide a proper cap rate and just wanted to let the folks at BiggerPockets know that in my experience almost every provided cap rate is wrong. 

Maybe I'm going about this wrong and someone can help correct my thought process (I'm using the 50% rule to estimate expenses since the proforma data seems suspect).Here is one example that I have seen:Property X$2,200,000.00Down Payment$770,000.00Loan Amount$1,430,000.00Annual Loan-$86,947.20Units111bed3Rent/unit$1,015.00Market Rent$1,050.002bed8Rent/unit$1,279.00Market Rent$1,305.00Gross Income$167,684.00NOI (50% rule)$83,842.00Yearly Income-$3,105.20Cash on Cash-0.40%Actual Cap rate3.81%Almost every property in my local area looks pretty similar to this one with negative COC or COC of 1-2%.

In short, it is a 10.5 CAP, with 14.0 cash on cash return.

Any thoughts on the purchase as well would be appreciated.Operating expenses/yearIncome / yearTotalRental income$655,249$655,249Laudry income$36,000$36,000Parking income$18,000$18,000Effective income$709,249$709,249Property tax$92,523Property Insurance$14,565Water/sewer$30,000Gas$20,000Advertisment$1,100Office$5,100Professional fees$2,713Property managment fee$18,000Waste managementCityHydro$170,000Maintenance and repairs$36,968Snow removal$4,000Total394,969$394,969Net operating income$314,280Cap rate about a 6% cap

And as for personal investments and getting a "discount" from a future broker....looks like a lot of firms around here work with Caps and once you hit your Cap...then you get to keep either 95 or 100% of your commission (minus taxes of course)....so any personal investments we do simply speed up reaching your cap faster and I suppose that's worth something....Thanks! 

Who owned it several owners ago and what a few people between then and now paid.It'll cash flow but it'll be a 6-7 CAP.  

What you will likely save on is near-term cap-ex expenses.

Keep banging your head against the wall, eventually you'll get through.

It doesn't take too much wiggling when it comes to assumptions about vacancy, repairs, or cap-ex allocation to turn a 6% cap into a 10% cap.