Yes, cap rates are used for fourplex's. In the area by SJSU most of what I've seen was a 5-7% cap rate with a few 4's and 8's in the mix. As for a price/unit it depends greatly on how many bedrooms are in each unit. Obviously the more bedrooms/unit the more valuable it is going to be. Presuming the building is producing income, 20% might be enough, but many of the lender's I have run into are starting to request 25% down - again it depends on which lender you are working with.
One ultra-simple calculation you can use that I have explained to a few of my newer investors is to factor in the rent vs. price - for every $100k a property costs you want to receive $1000/month income. If something costs $500k, you want $5000/month income. Again, this is a VERY, VERY simplified way of doing numbers. Ideally, you want to have your investment double within 10 years. This was nearly impossible in many areas a few years ago (i.e. Bay Area). Now it is becoming quite possible. Since you seem to have your sights set near the SJSU, I would say that doubling within 10 years might be quite a challenge. The reason being is because the area is very stable - the more "safe" an investment is the less you make. Since by the college is almost a guarantee to have tenants your risk goes down, meaning the $100k/$1000rent rule might not work in your situation.
If you have any questions feel free to contact me by phone or email.
Cell – 510-815-2000
Jul 25, 2009