Then offer the creditor a percentage of this amount as settlement in full.  

However if you didn’t calculate in at least some percentage of the rent for vacancy, repairs, and CapEx then eventually things will happen, such as a vacancy or a repair being needed and you will be out of pocket a much larger amount of money than just your $400.

Property management can be great if you are willing to give up a percentage of your gross rents to not deal with headaches, but it's not like you can just ignore your asset.

When you took in the increased cost of the build how did you arrive at that percentage?

I understand, to clarify the cash flow is not my only source of funds to purchase future deals as I am able to save a large portion of my W-2 income as well and the cash flow from the property is a very small percentage comparably.  

The investor then gets the property for a few percentage points of the total property value. 

.--- Owners don't understand the percentage of maintenance appointments tenants miss!

You should find out what percentage of the rent is being paid by S8 and by the tenant.Tenants have to sign the rent increase and some won't because they don't want their payment portion increasing.It's also highly unlikely a S8 office will approve the huge increase from $797 to $1300.- BTW: the $1300 includes all utilities being paid by the landlord.

With $50k I can get 866 share x .264 payout a month is $228.62.

Screen them as you normally would - does their income substantiate their portion of the rent +/- a little for changes in what the housing authority will pay out?