For the average sized kitchen, you're looking at $2k to recondition and paint professionally.

Vacancies, reconditioning, maintenance, inspections, legal costs, etc.They don't understand the importance of doing things correctly and providing a quality property.

We searched for used/ reconditioned but they are also expensive, hard to come by for exact sizes and matches, and need time and money to test before installing.

I have been bootstrapping the renovations as units come open, which has worked well as I don't have a big reserve fund and I want to keep what I have for a rainy day, (like a sewer pipe reconditioning project that just cost me 12k)With that being said there are other properties in the county that are similar to mine but are a condo complex and units are available to purchase individually on a regular 30yr fixed loan.   

Did they use used/reconditioned parts to save on costs?

You might get more rent.Just like flipping a property you have to recondition and get rent ready based on the type of tenant that will live in the property.If you are in an area with higher turnover than you don't want to put really nice stuff in there.Remember to not make it about your personal standards.What you deem acceptable and what other consider a nice place to live might be 2 different things.I make things functional but do not over improve.I can tell you that doing basic electrical and plumbing yourself will save you a ton.Stay away from contractors that make it seem like you are getting a good price and feel like you are getting over on them.I find the professional contractors give you a bid and if they win the work they don't complain about the low price they put forward they just get it done the right way.

I'll probably avoid some more potentially lucrative investments in favor of a well-priced investment that will need very little reconditioning and has a strong history. 

If you were to keep it, and were able to rent it for $1400/mo, by your calculations, it would barely produce a profit of $1200/year, and the tenants would surely be hard on it, and it would need to be reconditioned before sale.  

Just cross out the parts of the new lease you don't agree with and sign and initial and date next to it.Have all tenants over 18 sign just like you did.In fact I would print name,sign name,initial and date for each area crossed out if you want to be ultra cautious.The landlord will have to agree,come back with a compromise,or get you out.They will have lost rent and reconditioning cost.So if you pay on time most likely they will not want to lose you over this.The fact that they overpaid for the house and are having a hard time covering the mortgage is NOT your problem as a tenant.You didn't hold their hand to the papers they signed at closing.Sounds like they put a bad tenant in and they trashed the place.You came along and the landlord barely had money to fix things.So see if they will keep the regular lease in place and don't get onto them too bad for too many more repairs.It sounds like they are headed to foreclosure or close to it as it is.no legal advice

You have to define what we are talking about here.Average that I see is 30% Operating and Expenses,10% property management,10% vacancy.Every building is different and has it's own set of challenges.If someone self manages they can claim lower operating expenses with no management costs.Although the landlord does use up their time and energy which should have a monetary value to it.I tell landlords when I list their property that we have to count a property management fee in the numbers.If not a majority of the buyers will not be self managing and the numbers won't make sense to them.Otherwise we will be looking to sell to a small group who self manages.It depends on the size of the building as well.Many small buildings like a duplex or quad is self managed.Most larger buildings are not but there are a few.If you go over 50 units you can easily get a 5% property management fee but vacancy can generally run higher at 15% and with 30% O and E still puts you at 50%.I do see some buildings running at 60%.It's because the owners are underwater on the loans and have not maintained the property.They keep having to do patchwork repairs to get by and have high tenant turnover with rekey and reconditioning unit expenses which drives O and E above the 30% mark.If you factor rehab and going in and making changes and charging a slightly lower rent you can decrease tenant turnover and cute repairs to bring inline with the 50% total costs.You just have to look at what you can do with the property.The 50% is only a starting point.