During the inspection, which the sanitary company does, the inspector asked several question and came to the conclusion that at least the bathroom had to be new and requested a permit to be pulled and gave me a stop work order.

"When I put this property into the napkin figures It comes out:Purchase 189,000, Cash to close 42,800, Monthly rents 2500, property tax 300, insurance, 100, Mortgage 800, vacancy 10% =250, repairs 5% = 125Total 1575 dollarsBut when I add in snow removal, electric etc. as additional expenses cited by the realtor of 6870 per year divided by 12:1575 + 572 = 2147 dollars leaving 353 dollars after all expenses are paid assuming I am being given correct expenses.

unless you're an agent you can write a contract on a napkin, just get a simple one.

Additionally, I've yet to find a person who can "paper napkin" an investment with a HP12c or HP10B faster than someone with financial modeling experience.

put it on a napkin.

I take it you're not a proponent of the write-the-offer-on-a-napkin method?

Quick back of the napkin numbers I have run:Target Purchase Price: $370kEstimated Renovations: $40-50k (aiming for 2 month reno)Target sales price: $450k (this is based on my own research using county property records, Zillow, Trulia, and Redfin for neighborhood sales w/in past 12 months - not perfect COMPs, I know, but what I have to work with)This is my first foray into this type of thing, so unsure if an opportunity exists, so please let me know your thoughts and help me understand if I'm off in any of my thoughts or am missing something.  

Paul Santos, there is mention in the tenant guide of "public spaces" needing to be kept "sanitary," but I'm not sure what qualifies as a public space.

This "document" could be anything from a detailed report from a professional property management company or a napkin from a slum lord... so VARIFY these numbers.

Mike another point that I think should be clarified with regard to 2% and 50%.50% for expenses for napkin work is great  and will pretty much always be relevant up to a certain rental amount... high rents like 2500 to 4000 like we are seeing her on the west coast 50% is a little high to a lot high... 30% might be a better number at that point.2% was a window in time... that has closed for 90% of the US rental stock...