Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

Laws, taxes, insurance, adventure, new challenge, grow skills, etc. 

A Illegal simply starts a business entity , gets an EIN and insurances .

Make sure you ask them good questions, make sure they carry insurance and that they are available year round. 

If you are setting aside funds for capex, taxes, insurance, or other expenses that don't occur monthly, transfer those funds to Savings each month and hold them there until it's time to spend them.

My Insurance Agent has strongly recommended that I put a Construction Agreement in place with my Contractor to shield me from liability, etc. 

There is an offer to buy but if I include everything I've spent over the years, mortgage P&I, taxes, insurance, HOA, and recent repairs, I will just break even.

With the purchase, the rehab, the closing costs and the holding costs (hard money, taxes, insurance, utilities) our all in is around $200,000, but we have created $40,000 in equity.

the way to go about it is turn it over to your insurance and get the police report.. sometimes insurance will then subjugate the claim and go after the tenant criminally I had that happen on one of my rentals where the tenant did 40k in malicious damage on a new construction home I purchased in MS. 

Might be an additional cost there.If units are updated, capex items look good, leases and tenants look solid, and there are no other regular expenses besides the 5200 in insurance/property taxes then I like this deal.