BiggerPockets also has a calculator to analyze deals, and I highly recommend you start this as soon as possible, even if you are not ready to buy.

And your central point I think, is to use conservative numbers so the deal still makes sense even in the worst case scenario.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

So for our deal, even if it was cosmetic changes it took us a lot of hard work.

Our water bill is below 150/month and even below 100 some months when it's not winter and tenants aren't letting the faucets drip, but overall it's not a nuisance. 

Even though there will be two other tenants, you still want coverage for your personal property. 

Requiring an application before showing is always a mistake but even more so in todays market.

Cleveland, Ohio is a great market to focus on for cash flow and specific pockets have gone up 2x and upwards of 4x in the last 5-10 years even!

The overall LTV (including all 3 mortgages) will be key and your selling point will need to be that the 2nd mortgage ($8k) will burn off in 2.5 years (based on your surprise that it was even out there, I'd recommend that you follow up in 2.5 years and ensure that it's been satisified, so that it doesn't surprise you again in the future).Does the $8k grant vest over the 5 years? 

Inspector refused to check it even though he was still in the property finishing up the inspection.