I Offered it to them at 10% below market with him paying utilities. he wanted it, so I screened him to verify he can afford it.

Then I would speak with a land surveyor or civil engineer to get a sense of what it would take to obtain all the entitlements and bring in the utilities, etc.     

There's no one size fits all of course, but generally the STR/MTR/LTR mix in a multi-family unit can be challenging because the way renters utilize these properties is so different.

The income includes things like late fees, a rented garage, and utilities that are billed back to the tenant. 

Prepare for additional costs: If you’re adding units, you’ll likely need to address the water meter situation and possibly upgrade utilities.

As this approach uses very little documentation, it is the least reliable methodology in preparing a cost segregation study.To see all of the steps included within each method, refer to Chapter 3 of the IRS Cost Segregation Audit Techniques Guide.What methodology has your company utilized?

Be prepared to show a lease, some utility bill, or credit card statement showing you live somewhere else.

STR management is 20-25% (I would recommend self managing or getting a VA), since income is higher you could probably get away with 5% for maintenance / cap ex but remember you need to cover utilities and cleaning for these units which drives up costs.

Estimate utilities and figure out who pays them (separate meters, landlord paid, etc)5.

Tenants may not occupy residence without utility service except during brief interruptions beyond your control.