I still own this property and I still benefit from roughly $500 a month net cash flow after management fees and reserves for items such as capital expenditures and vacancy.

Hi Pocketeers!I need some assistance.  Does anyone have any suggestions on a program or software that would allow me to create project files for different projects I'm overseeing?  I need to create the project, track ...

From your initial post I wasn't sure if you accounted for vacancy rate, capital expenditures, property management, etc. so that is very smart you included those in your numbers.

@Nick Bleser In B&H the two biggest external risks are:(A) a decrease in demand and (B) a change in neighborhood desirabilityIn both cases, your revenue is threatened AND there's a potential need to increase expenditures - there isn't much you can do about it.Apply that to market cycles, and you're assuming risk if a cycle is likely to decrease rental demand ... because fewer people will want to culturally rent, because there will be more supply, or because there's a declining population IN THAT AREA.  

I have always calculated 10% capital expenditures, 10% vacancy rate, 10% property management, 5% maintenance/repairs.

For example, for one of my rentals, I may be able to make the following capex assumptions over a 20 year period:- New Roof:  Every 20 Years:  $5000- New Water Heater:  Every 10 Years:  $500- New HVAC:  Every 20 Years:  $4000- Siding Repairs:  Every 20 Years:  $3000- Electrical Upgrades:  Every 20 Years:  $2500- Plumbing Upgrades:  Every 20 Years;  $2500- New Appliances:  Every 10 Years:  $1000That's a total expenditure of about $20,000 every 20 years, or about $1000 per year. 

For the capital expenditures and repairs I used 8% for each (remember these are % of rent, not property value) which might be a little high, but I would rather be pleasantly surprised.If this looks good for a property, I go further, just to see what MIGHT happen.

While I agree with the other posters that it seems odd you are only required to put 10% down, I have more of a problem with your monthly vacancy and capex expenditures.

So, all your expenses, including all loan payments plus a percentage for future capital expenditures (roof), vacancy, PM, etc.I would make sure of the accuracy of the expenses-tax after sale, insurance after sale etc. then use percentages for CAPEX and vacancy, run that through a calculator-like the one on BP-and post that back on here, and you will get lots of help I'm sure.It looks like you are on to something with this transaction, you need to run your due diligence process to make sure of the potential income and what your offer needs to be.

This expenditure will eat up almost all my liquid cash but I really like the cash flow as this will allow me to move on to my next property much faster.