Just ran a quick search and Fayetteville, NC seems to rank at or near the top when it comes to the rental vacancy rates in NC. http://www.civicdashboards.com/city/fayetteville-n...Could anyone comment on that or is that something you simply factor into your numbers before going into a deal?

Should I improve the property and use as a proof of concept to see if my market can handle a higher rent factor?

I used to say I am a real estate investor or that I owned a real estate investment company, but people either thought that I was a flipper or real estate broker. years back in ulta liberal Portlandia I could not tell people what I did.I was logging ( raping the forests)  I was building subdivisions ( big bad developer ) and I had a courthouse steps buying division ( kicking poor people out of their houses)  so I just said I was in real estate  LOL>  

@Marielle Walter as stated above, Boston and the closely surrounding areas are VERY competitive right now - $5-600k will be tough (factor in your renovations after purchasing too). 

@Brandon Swartwood I would recommend starting with the ULI Guide To Professional Real estate Development.

My friend is a real estate developer who has successfully bought, renovated and sold/rented out a few small apartment buildings in the area (I live in the Bay Area so there are plenty of 4-8 unit buildings).  

They do property development also so they are used to working with investors/developers.

Are there other factors we need to consider?

Thus, the Department believes that in appropriate circumstances, owners and managers may develop and implement reasonable occupancy requirements based on factors such as the number and size of sleeping areas or bedrooms and the overall size of the dwelling unit.

Then take next best highest and use tenant and figure out rent per sq ft they could pay.You could possibly sell the land to an end user tenant, sell the land to a developer and make a spread, ground lease the land, or do a NN or NNN lease and construct the building.You need to analyze the tax implications of selling outright and paying higher short term gains capital tax versus developing and then converting to a new value created loan of 65 to 75% LTV.