If a large repair or tax/insurance hike were to happen with a multi-unit than you at least have other units cash flowing (usually) which helps stabilize such unexpected costs. 

@James Boreno You’ll likely owe taxes, but don’t forget to account for your adjusted cost basis, which factors in the original purchase price, depreciation over 10 years, and any capital improvements.

My last transaction is up ~$1M above costs. 

Many months of costly vacancy, local market rent & resale deteriation, special assessments, property taxes and maintanance fees suggest a quick sale would have been the wise thing to do 2 years ago.

My wife works for Ferguson, and I know many contractors, so I can get a lot of materials at cost.

Also your permitting process, type or land, grade of land, if underpinning is required will all play a factor into your cost. 

I am estimating the note would cost 2.5k per month at most. 

We almost went with a loan that we have to pay all the cost upfront and then get reimbursed on the back end and that was just not something we were willing to do.

Imagine if it cost 1000 to send out 50 letters but half of them responded and half of those wanted an offer and half of those accepted an offer and half of those closed and half of those resold for a net 50k. 

At that class of property, the turn overs are costly.