Thanks Dennis, I think you're right that planning for a more conservative return would be a good idea.I re-ran my numbers at an even more conservative level:Lower ARV: $800,000Lower income levels (I'm assuming it will take a couple years to get up to full potential income, but giving myself 3 years was a conservative estimate):Year 1: 50k (NOI $1,000)Year 2: 80k (NOI $31,000)Year 3: 100k (NOI $51,000)My ROI numbers come out to:1% (year 1) 46% (year 2) 76% (year 3)This scenario seems like an acceptable risk to me, when the upside seems far more profitable.

Can anyone recommend software which would accept monthly payments (from me to seller) and create proper 1099 forms for tax purposes at year end? 

@Joshua Lanzieri when renovating older properties there are almost always negative surprises.Go watch any HGTV renovation show and most of them will have this as a cliff-hanger, forcing the choice of either going over budget or cutting back elsewhere.10% overruns happen often, but 50% is NOT acceptable!

You have to learn what you are willing to accept as not perfect, but good enough. 

True, I am 100% with you on that.The point here is, when you analyze, you do based on what you know now (what is known as a fact today) and on what is highly likely to happened (again from today) and to accept the fact that things might change tommrow.Life happened every day, that’s why  we need to stay firm with our direction but flexible with our approach.having lived through the HORRORS of those years fully engrossed in the industry almost nationwide... it was regional on who did well and who had troubles.. no question well positioned landlords in Portland for instance no issue.. 

@Kenneth Jenkins you forgot to mention owners that expect a PMC to use contractors off Craigslist that are unlicensed, NOT insured and rarely have acceptable experience/skill - but, they quote the "best" price.These same owners will sue a PMC if using these types of contractors results in a tenant lawsuit.

All self praise shared by Neal Bawa before was just that advertisement.

For example, I mention that every adult must pay a $30 application fee, pass my credit/criminal background, make a combined income of 3x the rent, and whether or not the property accepts pets.

We feared it was too low, but we were not willing to accept anything more and left it in Gods hands.

Would you accept a tenant telling you they were going to change how much rent they were going to pay, despite what their lease contract stated?