Perhaps he runs negative cash flow while repaying the purchase loan or there is something I missed so my math didn't add up properly.  

This isn't hard math here buddy...."

He is MUCH better at math than me.

Do the math with the 6% tax rate, and if the numbers work, then do it. 

The liquidation cost is on the high end at 10%, which is just what I estimated, so I now have plenty of margin, making math easy. 

I even kept the cash flow number conservative and the math still works, $1K/month on a $400K property is good but not a home run by any means. 

Eric the big one for us is when trying to buy subdivision land.. and seller see's one acre being fold for 400k and they have 30 acres and now want 12 mil.. when in fact larger parcels for SFR are trading on the market at say 200k an acre.. they refuse to understand that it cost 50k or more per lot to get those lots buildable.. they just do the simple math and stick that price on them.  

Sometimes I have to show clients the math for them to get comfortable with it. 

If you math it out it is probably unlikely that you will be cash flowing on a property that you are using 100% leverage on from a turnkey company.

Be honest and do the math.