I found this deal off market and found agreeable terms with the seller involving a midterm lease during renovation.

Maybe % of purchase price (though that would mean low estimates for killer deals, and higher estimates for hot market properties)?

Market rents are above $2k, per door.

My concern here is that depending on where your property is located, that might not be the market standard in that neighborhood.

Hopefully along the way your properties appreciate, you pay down debts  (mortgages) from operating income, and you get market appreciation on what you can rent each unit for - giving you more income each month. 

Made good money for a while then the market turned and he lost a lot of coin ...  

I know the market fluctuates and that can be a factor, but generally speaking.

Evaluate the rental market in your area to determine the optimal configuration for maximizing rental income.The choice between using cash flow from your current house to cover expenses or pay off the mortgage faster depends on your long-term financial goals and risk tolerance.

Off market deal that I was approached on by someone I have done deals with in the past.

San Jose is obviously a tough market to start in for cash flow - are you looking at any remote investing markets/strategies?