If they don't understand cap rates and how to use the factors that drive cap rates to determine value they may just be shooting from the hip.

Sounds like I should definitely factor in more hold time and keep an eye on the exterior work.I imagine you can put off landscaping and curb appeal though ;)

But I will say that the beauty of real estate is that EVERYTHING IS NEGOTIABLE.

Traffic/congestion may be a factor.  

I've ran the number a million ways but maybe there's something I'm not factoring in. 

I'm a newbie myself but the main factors are the purchase price and neighborhood rents.

I know that each area is different and it's impossible to isolate one factor.  

HI Tom,I've done plenty of these on the lender end and investor end as well.If you go the FHA route which is the least down payment option you'll only need 3.5% down and will need to adhere to:- min 3 months cash reserves based on the proposed monthly payment- gross rents on all 4 units X 75% factor must be equal or greater than the total monthly payment of the property (PITIA - I found out this not include HOA in this formula as we had a fourplex with a HOA once too).

This was the route taken for my grandparents cottage and it came out beautifully. 

That is the beauty of this... based on your abilities you can create whatever kind of deal you want.