The cap rate I think is 6.5% and Cash on Cash is only 3%.

One thing for sure is having a reale state business makes corporate lending sometimes difficult as its considered very risky.

The cap rate I think is 6.5% and Cash on Cash is only 3%.

Here in Hawaii, where rents are much higher than the national average (we're actually highest in the country according to many surveys/studies), it's difficult that repairs and other associated costs could take that big a chunk out of the high cost of the rent.

That's not real expensive and I've done some of them myself.I've seen older places that the service panel was sufficient but it's probably not, probably from $900-$2K to fix that.Older houses don't have nearly enough outlets per foot of wall space, again it's not difficult but if the electrian is there he can do those too.

I've heard being classified as a "real estate professional" (ie 750 hour test) will avoid cap gains tax.

I have a private equity firm that purchase MHP 3 star or better likes seasoned MHP with 8 cap or better.

He was finding it difficult to find homes that would generate cash flow in that area (as you are) so he decided to build.

Is it difficult for contractors to get a good list of references, or do most of them not plan to be around in 5 years?

The difference is that you have an understanding of the operating expenses and they don't.It is difficult to find rentals that will cash flow in almost every market.