Here are the two analyses: Initial Investment Purchase Price $89,000.00 Closing Costs $2,225.00 Renovation Costs(allegedly turn key) $3,000.00 Total Investment Costs $94,225.00 Financing Costs Down Payment (%) 20.00% Down Payment ($) $17,800.00 Mortgage Balance $71,200.00 Annual Interest Rate 4.00% Loan Term (months) 360 Total Invested Capital $23,025.00 Fixed Monthly Operating Expenses P&I $339.92 Financing Charges $0.00 Administration Fees $12.50 Property Taxes $197.08 Homeowners Insurance $111.86 HOA Fees $0.00 Fixed Monthly Total Costs $661.36 Variable Monthly Operating Expenses Property Management $157.50 Advertisements/Referrals $65.63 Vacancy & Collection Losses $131.25 Capital Expenditures Replacement Fund $50.00 General Maintenance Fund $50.00 Temporary Utilities $10.00 Pest Control (Optional) $0.00 Lawn Care (Optional) $0.00 Total Variable Expenses $464.38 Total Monthly Expenses $1,125.74 Annual Operating Expenses $13,508.86 Operating Income Monthly Market Rent $1,575.00 Annual Gross Revenue $18,900.00 Monthly Profit (or Loss) $449.26 Annual Net Profit (or Loss) $5,391.14I present to you such a thorough analysis in the attempt to make sure I'm not making any glaring mistakes!

Industry standard is 10% per monthly rent for vacancy, repairs and maintenance and capital expenditures.

@Lance Lvovsky by tax planning you mean cap ex deductions over the life of the expenditure or something else?

When you take money out for capital expenditures, where do you put it?  

On an older home, I typically budget around 15% of gross rents for capital expenditures and repairs.Water - most of the time tenant's will pay for water in SFHs.

Another possible option is partnering with a local investor that you meet at a local REI meetup/REIA.One thing missing from the above is capital expenditures which should be 10% of rents.Don't let the above discourage you as a good deal will always find money.Keep us informed of how the deal works out!

Anything to reduce the buyers initial out of pocket expenditures.

We actually take a portion of our gross rents and put them into a savings account each month in anticipation of future large CAP EX expenditures such as roofs, heating/AC units, appliances etc.The rest we leave in our checking and cash flow other smaller repairs, make readies, pay for mortgages and utilities etc.In addition we have a credit card we use exclusively for our properties.If nothing else this helps when it comes time to do taxes.

I just keep a running sheet for each property (you could add an additional column to specify unit). and use the sort function to group by types of expenditures, date, etc., depending on what my purpose is.

Also, in Jake & Gino's first podcast, it was mentioned that some banks use $3,200 yearly expenses per unit in their underwriting; I don't know if that's still the case (if anyone knows from experience, I'd be interested to hear from you), but that would bring expenses up to $25.6k/year and put you at -$433/month starting out.Depending on your risk tolerance, it sounds like there could be upside if you fill the vacancies, raise rents, and there aren't significant capital expenditures needed soon- I'm more risk averse though, so personally I'd probably pass in favor of something that provides the minimum return I'm looking for from month one.