Nice to meet someone in a similar situation (currently househacking, recovering ex-consultant, also hoping to quit the 9-5 at some point in the near-ish future, and looking for properties in similar parts of town).

-Cap Ex budget -$ 200 a monthly What am I missing and am I the only one thinking this deal is a steal? 

First always seek legal counsel with an attorney:ask them the pros & cons of some of the following:1) Debt: secure a loan against the property you receive interest payments.2) Equity: record an option to buy the property (ex. you have the option to buy the property for $115k for a specified time period.3) Purchase a partial ownership interest, ex. tenant in common ownership of 50% of equity4) combo equity participation loan , you share in the upside equity.

The numbers seem a little too tight when you add in the cap ex and possible water leak. 

EX....

@Jeremy Margaritondo, this is very interesting, as an ex-house hacker. 

That will get eaten up with vacancy, break/fix repairs, eventual cap-ex, etc. 

I always like to start with the rents and reverse engineer it.Current rent $625-25% total (vacancy repairs cap ex management)Assuming tenants pay all utilities $470 left before monthly payment, taxes, insurance -$500(estimated) Monthly mortgage payment & insurance (no tax) for a 15 year loan.OR-$350(estimated) Monthly mortgage payment & insurance (no tax) for a 30 year loan.Depending on what kind of loan you have out15 year loan, cash flow = -$3030 year loan, cash flow = $120This does not take into consideration the rent increases.

At that time the ex wife warned us that he was bad at managing money and would likely get behind on rent.

Rents, vacancy, utilities, when the last time major cap-ex items were touched, etc.