Right now, I have a friend who is considering adding a half bath to his first floor by removing a closet w/o a permit and I am really trying to convince him not to. 

In addition to the high cost of building, the low appraisal reflects there are many more owner occupied purchasers than investor purchasers so adding the ADU likely reduces the buyer pool. 

However, none of them purchased it. 

There is the theoretical/mathematical way of doing things then there is the real world.Most deals are NOT going to be valued by cap rate, at least at purchase.  

Here is one proof point.This past week a friend of mine was putting an offer in on a Midwest apartment portfolio.

Not at all.I've been answering questions on here for 10 years without ever asking for business and have made 1000s of friends and helped 100s of clients close deals on investment properties.

Purchase price: $320,000 Cash invested: $105,000 I started with me first property investment.

I'm in need of some advice on purchasing QuickBooks Desktop Pro.

I have expanded one park but purchased 9 overall and I will tell you that you can get a much much better deal buying existing and scaling it.New parks are extremely time-demanding and take a lot of capital.

Why do you think purchase contracts are so long and have such small print?