dealing with family, can someone annalyze this deal?

[Jared Rebling]

I appreciate all the facts and opinions here at BP. We have been members for 2 years now. I have been listening and learning from the background. We purchased our first rental January 1 2020, a 16 unit apartment complex.

I know it's dangerous to deal with family. I hate to think I would miss out on an opportunity by letting this go by without sincere analysis. I feel blinded by dealing with family.

The unit is four-plex apartment building that needs a lot of paint, all new flooring, bathroom vanities, interior doors, an exterior door, a large window replaced and probably an in wall A/C or 2. This is located in a small Iowa town with small growth potential and the reputation of the place is dismal. My wife and I are starting our 3rd year operating our first rental complex 4 blocks away, and have made upgrades and improved the reputation of the place. We are buying these units from my dad, on contract, also. 

The "deal" he has proposed to us is to manage the 4-plex as our own and at our cost. He pays taxes and insurance and gets the rent from one unit. He also keeps ownership.

I would much rather buy the place outright but he's not ready for that yet. I'm sure he will sell to us when he is finally ready, I'm also fairly certain we would inherit it if the worst would happen. 

My concern is that buying it now would be cheaper due to his lack of maintenance and background checks on tenants. We bring a better reputation to the place and that has value. 

Running the rental calculator, dollars-wise, it's a wash. The dollars are same but with his deal, we build no equity.

Taxes and Insurance are $234 monthly. Units would rent for $500. Fixed expenses are $745 monthly. We did a conservative rehab estimate of $12,000 to have rentability at our standards. We do 90% of our own repairs and maintenance. We would offer $50000 to buy and it should be worth $85000 when complete.

What is reputation worth? 

Any and all input is highly appreciated.