If there is no mortgage payment at present, escrow items are not added back in the above explanation.It's more nuanced than this and there are many exceptions/caveats, but this gives a high-level explanation. 

Owners are ok, not happy lol but ok with paying for items and issues, just want to understand what's going on. 

Myth: You never have to worry about getting your rent when you have section 8 tenants.Reality: rent payments can get suspended if the unit fails annual inspection, even if the items that caused it to fail are the tenants fault.Reality: the tenant portion of the rent is never guaranteed.Reality: if a tenant wants to leverage you for an upgrade, like a new stove or a new refrigerator, they can cause housing payments to get suspended by filing a complaint with their caseworker.

I would say about $8k average, sometimes reaching towards $20k depending on length of run and the difficulty of tie-in to the City main.I would not, as a buyer, wnat to take a chance on this..even if they are working well now, it is a ticking time bomb and a large expense.So I would wrap your head around the concept of offering a credit towards this item.

If you were able to use the standard TREC lease agreement, there are many items that protect the property/landlord in there. 

Looking at the data you provided for Melbourne, FL:- Average rent is around $2,000-$2,100- Rents have actually decreased slightly year-over-year- There's a wide range of rental prices ($650 to $6,500)This suggests a diverse market with potential opportunities, but also some volatility.

On the residential side my experience has been that any cash flow I accumulate gets eaten by major “replacement” items every three years.  

It is best to provide them with a checklist of items you are requesting.

It is a diverse area where certain areas offer both, with lower purchase prices.

The first line of item #1 of the note should be:Who is that.