I mainly want to ask if these assumptions are reasonable and if there's anything I haven't considered:(1) multifamily units in NJ close to New York City, ~$1,000,000, 20% down payment, (2) Using the following assumptions: 4% appreciation rate, 6.5% interest rate and 5.0% refinance after 5 years, $10,000 yearly maintenance fee(3) ~$6,000 monthly rental and assume 3% increase yearly with 5% vacancy rate(4) Based on the above, the calculated IRR if selling at the 10th year is ~19% (considering tax benefits) and ~17% (without tax benefits).

The owner was motivated due to personal circumstances and wanted to avoid the hassle of listing the property publicly.

I would recommend an STR for the best tax benefits and cash flow no doubt.

Instead of evicting them, i was thinking is there some way that I could rent it back to him for very cheap (mainly to cover just the taxes/ insurance) ie 2k a year rather than the going rate of 2k a month for similar properties.

Wanted to still be close to family but maintain a cheaper lifestyle, still have strong appreciation, and much better tenant/landlord laws, taxes, etc. 

Make sure to account for property taxes, insurance, and any HOA fees, as those can vary significantly in different markets and impact your cash flow.

However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

Start by talking to a cross-border CPA and attorney to handle taxes and legal structures properly.

BTW behind Texas.When all forms of taxes are calculated (income, property, and sales tax), CA ranks below the middle of the nation in total tax rate.  

Background checks on how well they avoid trouble.