The final nail in that coffin was their Hosting/Managing fees would use up 50% of the Rents and after a few years they would want to spend another $10,000 on new furniture etc.

@Nathan Milholin hit the nail on the head and I couldn't agree more, with perhaps the addition that maintenance will also depend on what condition the property currently is at purchase. 

In my day when it actually did this for a living I think we had to chase down about 50 foreclosures to nail one.

Especially relative to others with more well known insurance companies who had to fight tooth and nail. 

@Matthew CrivelliYou hit the head on the nail.

(Guys in pickups working for beer money)When they get caught "short dumping" the cops nail the "generator" of the waste (YOU) too. 

Nicholas nailed it.

Most people get too caught on underwriting every specific nail in the property rather than the operator's team and track record.

People who only have a hammer say everything looks like a nail but you know how that saying goes…Yes you can use 75% of the gross rental lease of the new property you purchase and sometimes it’s best to buy the property vacant because you can use market rental rate x 75% - PITIA or monthly payment = net rental income.When buying a rental property that has 1-4 units, it’s better to have the property vacant because market rents are usually higher than the sellers current lease (typically).Its good to figure out what your current expenses are right now , what your current income is or will be by the time you intend to buy, then go out and find a hypothetical property in the area you would like to target and work backwards to see what it would take to qualify for this hypothetical property with estimated market rents, property taxes, and insurance. 

@Chelsea Gilford  yeah @Joseph Cacciapaglia here hits the nail on the head.