I do agree with @Anthony R. that you need to be sure to include enough in your budget for repairs and also Capital Expenditures (new roof, furnace, etc) I think @Ben Leybovich did a study a while back and found the average home in American needed about $250 in repairs per month if you really figure in everything that will eventually wear out (the entire home accept the foundation and framing).

The records or other documentary evidence must support all the following: The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments and any other expenses.The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year.The date of the expenditure or use.The business or investment purpose for the expenditure or use

I have seen Brandon use the BP calculators to get these numbers, which typically take into account 25% of the rent for vacancy, property management, repairs/maintenance and capital expenditures; while others (i.e. local wholesalers) calculate them without taking those into account (i.e.

I do all of that and more expect for some of the bids a those don’t take long to get and I pretty much know what they are anyways since I do a lot of these.The risk with this is if somehow seller can’t deliver clear Title, then you are out these expenditures but that is rare.Not sure about your area, but here in Los Angeles, I can have all the plans completed and submit to B&S (building and safety) before being on Title but to actually get the project to RTI, I do need to show I am on Title or get notarized approval from seller to submit to City.I typically make my offers with closing dates of 10 Days but I love it when sellers need 30 or 60 Days to close as that saves me holding costs while I do all the plans and City submittal/clearances.

@Kris Mo Consider your big capital expenditures; roof, hvac, plumbing, etc.

You will also want to know what typical vacancy rates are like in the area, the terms of the current leases, what capital expenditures he has done recently.

In general, every "repair" expenditure needs to be capitalized (treated as an asset rather than an expense) and depreciated- expensed- over a number of years; how long depends on the life of the asset). 

And many times they are cheaper houses, where one big capital expenditure easily wipes out most of the income.

Sell it.Either way I’d use the cash for a down payment on a “new” home for the family as we have outgrown our current house and then rent this one out as well.The big capital expenditures (roof) are what scares me but then again paying fees for selling also adds up quickly.I’m going back and forth, please help. 

Buying a bigger unit than you have the means for (5%) means you also don’t have the cash reserves for the capital expenditures.