You can also learn how to calculate cap rates and cash on cash return to further evaluate a deal. 

If you can find something at a 6% cap rate (or more) I think it would be good to stay local and build up scale with your property manager.  

@Preston L'EcuyerSince this is the SF built in 81, you will definitely need to set aside more than $1200 per year for Cap Ex. 

However, the cap expense/maintenance costs in those low cost areas are not much less than in higher appreciation markets.  

Taxes do seem high but then again I live in CO where the taxes are crazy low compared to the rest of the US...Also, I don't know what the cap rates are going for a class C building in Ann Arbor but it appears they have this one listed at an 8 cap if the numbers you gave are their numbers...while you want to purchase at a 9.38 cap.

There are expenses your not accounting for like Cap ex, maintenance and repairs, vacancy, management....or maybe you are.

Even after cap gains, their money would make way more in the stock market....

It makes sense from a COC return, it would be a 10 Cap, the 2% rule check it just seems to good to be true. 

All the Walgreens are listed for over $5M (that makes sense), a few of the CVS are listed at ~$3.4, but many of them are around $1M, some even less and that seems suspicious.All are absolute NNN corporate leases with 15+ years on the lease with fairly large lots and CAPs above 5%.

Perhaps those interest rates are very low with the credit union but $480k is a very low loan size cap.