And if there's a dog, charge them increased rent, cause you're gonna need it to recondition the yard after they're gone. 

They are $150 new or reconditioned for $100.

I do not do CL.For used appliances I use stores, one is strictly used, reconditioned with 1 year warranty.

Then, you'd negotiate to buy with enough room to make a profit after estimating cost to recondition, holding and advertising. 

Some investors over the years of paying down debt service will simply keep rental rates low or raise at rates below market.This way tenant turnover is very low to non-existent and re-conditioning costs are minimal.The landlord also knows the pay history and tendencies of each tenant being long term versus finding a new tenant to start a history with.

IMHO, it is typically cheaper to address things during the vacancy period than it is to fix it when it is occupied, but it can add several hundred dollars to an already expensive reconditioning.Usually, the labor costs is going to be less during a reconditioning though because there are less trips and multiple items being addressed.

If you dumped that 10k into this place then your capex/maintenance shouldn't be 20% since almost everything would be new/reconditioned.60k purchase15k down payment (25%)5.4% interest555 per month253 P&I, 215 HOA, 36 tax, 51 insurance,900 rentLeaves you with 345 mo, and 10k in the bank for reserves which is = to about 39 mos of set asides (20% maint/cap, 8% vacancy).If you get your loan to 5% vs 5.4 you're at 490 per mo and that gets you 410 left over.

If you were to keep it, and were able to rent it for $1400/mo, by your calculations, it would barely produce a profit of $1200/year, and the tenants would surely be hard on it, and it would need to be reconditioned before sale.  

Did they use used/reconditioned parts to save on costs?

You have to define what we are talking about here.Average that I see is 30% Operating and Expenses,10% property management,10% vacancy.Every building is different and has it's own set of challenges.If someone self manages they can claim lower operating expenses with no management costs.Although the landlord does use up their time and energy which should have a monetary value to it.I tell landlords when I list their property that we have to count a property management fee in the numbers.If not a majority of the buyers will not be self managing and the numbers won't make sense to them.Otherwise we will be looking to sell to a small group who self manages.It depends on the size of the building as well.Many small buildings like a duplex or quad is self managed.Most larger buildings are not but there are a few.If you go over 50 units you can easily get a 5% property management fee but vacancy can generally run higher at 15% and with 30% O and E still puts you at 50%.I do see some buildings running at 60%.It's because the owners are underwater on the loans and have not maintained the property.They keep having to do patchwork repairs to get by and have high tenant turnover with rekey and reconditioning unit expenses which drives O and E above the 30% mark.If you factor rehab and going in and making changes and charging a slightly lower rent you can decrease tenant turnover and cute repairs to bring inline with the 50% total costs.You just have to look at what you can do with the property.The 50% is only a starting point.