CapEx is included, but is considerably lower because it's a very new, excellent condition property (I considered things such as paint, appliances, flooring that would be needed while we still own the property).Purchase Price $350,000Purchase Closing Costs $1,300Total Project Cost $351,300ARV $350,000Down Payment $12,250Loan Amount $337,750Amortized for 30 yearsLoan Interest Rate 4.6%Monthly P&I $1,731.46Total Cash Needed $13,550.002% Rule 0.85%Initial Equity $12,250Monthly Income ($1500 per unit) $3,000 Monthly Expenses (Including CapEx) $2,607 Monthly Cashflow $392 Pro Forma Cap 7.28% Total Cash Needed $13,550.00Cash on Cash ROI 34.73% Purchase Cap Rate 7.28%Est Vacancy $150PMI $200Est CapEx $63Insurance $80P&I $1,731.46My only major concern is that I'm not meeting the 2% rule (and just short of 1%, even), but this is probably the closest property I've seen, and has a significant cash on cash ROI.

The house was built in 1938, it's a craftsman style home, original hardwood flooring in good shape, original windows but it very good shape, the walls and ceiling had been filled with blown insulation, had a new roof installed in 2017, and the sellers were willing to pay 5k to have the house painted to the color of your choice.  

@Heather Wingenbach  This should help: http://fhahandbook.com/appraisal-guidelines.phpPay special attention to peeling paint (even a little bit), loose hand rails, cracked or broken glass, crumbly cement steps, etc. 

My client has cleaned up all the trash/crap the tenants left and is planning to clean inside and paint a little to make it more presentable.

My client has cleaned up all the trash/crap the tenants left and is planning to clean inside and paint a little to make it more presentable.

(e.g. the extra sheet of drywall, nails, tape, paint, primer, new trim boards, etc.)4.

It will be rental ready after paint and staging, which I will pay for and my partner will provide the painting and staging services.

-All walls must be wiped clean, with any holes whether they be nail, screw, tack, or punch hole patched AND painted.

My daughter ordered hers as seconds ,they came in mismatched different colors and  she had them painted to match.

I have plenty of experience in new construction as a painting contractor and assistant project manager for a custom builder here in Bend.