This is conservative but not unheard of. The money is in tenant retention. Which brings us back to the upside: If you go in and spend 20% on Maintenance and a few upgrades your tenant may stay long term.
1 Be real about your numbers & have funds in place
2 Get a good management plan with a focus on service: keep a paying tenant happy.
Add management, repairs and insurance...for a quick calculation figure 30% off the top.
I'll explain Cap Rate further in the next thread.