Here's the quick overview of my numbers and projections with more detail in screenshots of my excel spreadsheets:Purchase Price:  $365,000Price Per Unit:  $60,833Two-Family:  $121,667Four-Family: $243,333Rehab Estimates:  $60,000 ($10K/unit) Estimated After Repair Value:  $575,000Loan:  90% LTV (of purchase price) @ 12% interest for 6 months with 2 points paid on exitProjected Cash-On-Cash Return:  29.35%Projected Internal Rate of Return:  51.02%Here's a picture of the current rent roll (two units were vacant) and my projection of the rent rollCurrent Rents:  (more details considering the numbers don't tell the whole story)Two-FamilyUnit 1 (2BR+):  VACANT - son-in-law lived here and moved out prior to closingUnit 2 (2BR):  VACANT - empty when I walked it... he was "finishing" itFour-FamilyUnit 1 (2BR):  $200/week H&HW included - one bedroom is painted entirely black, multiple windows are broken, and other weird things...Unit 2 (1BR):  $780/month H&HW included - only "normal" tenant in the buildingUnit 3 (Studio):  $150/week H&HW&E included - complete hoarder... floor to ceiling with junk except for a small path from his bed to the bathroom and the fridgeUnit 4 (Studio):  $155/week H&HW&E included - smokes in her apartment without a care in the world... had a lit cigarette while I was walking throughProjected Rents:Two-FamilyUnit 1 (2BR+):  $1,400/month (OWNER-OCCUPIED) nothing includedUnit 2 (2BR):  $1,200/month nothing includedFour-FamilyUnit 1 (2BR):  $1,200/month H&HW includedUnit 2 (1BR):  $1,100/month H&HW includedUnit 3 (Studio):  $1,000/mo H&HW&E includedUnit 4 (Studio):  $1,000/mo H&HW&E includedHere's how the numbers broke down for cash in and cash out:Actual and projected expenses for the properties (I was given a single sheet of paper with hand-written numbers). 

I do not rent to any smokers.

"It looks like it's broken because someone was putting cigarettes out on the coil". 

We are doing a full rehab on it, including bathrooms and kitchen, paint, and replacing some insolation holding a lot of the stench of cigarettes.

I was probably somewhere drinking beer and smoking cigarettes. 

The moment I walked in, I could tell it was a smoker's house.

I needed a tenant right away so I stupidly rented it to a smoker. 

Signing lease then discovering was home to former smokers.

How important the A/C is will depend on where your rental property is located and how hot the temps get there and how many months the hot weather lasts.I would just include replacing the filters as a bonus to the tenant.Filters say they last 3 months but really it is not true.This is especially if you have a smoker or a tenant with pets.What happens is air filters should be replaced if the cheap ones about every month to 2 months max.Expensive ones you can go up to 2 months.If you wait 3 as more dirt is attached to the filter it restricts air flow and won't pull in as much dirt.When this happens less air will flow through the vents and the tenant will turn the unit down more and the resistance will make the motor work harder and wear out faster.I was having this happen in my house.A/C unit is 9 years old.When it gets in the high 90's here the A/C unit was getting in the 80's.Has an A/C guy come out.I had the old analog mercury switch A/C thermostat which is off by as much as 5 to 6 degrees sometimes the guy told me.I use the Filtrete Ultra Allergen because we have 5 cats and was replacing filter every 3 months (cost about 17 bucks a filter).The A/C guy explained about air flow and that I need to replace filter every month.The high end filter will catch more particles he said and when you keep them replaced they are fine every month.If you wait the 3 months it will reduce the air flow to much with the dirt it catches.So I replaced the filter and he also checked my free on level which was fine but my coils needed cleaning.He just basically took a hose and cleaned it out after turning power off and before the 100 dollar bill was not sticking to the coil halfway to the bottom.After cleaning the bill was sticking to the coil everywhere.He said it's important that when the heat comes out the coil can cool it properly before it goes back in the house.I bought the electronic thermostat myself for 25 bucks and took out the mercury one.Now with it being 95 outside it is holding at 73 degrees just fine.So I would replace filter every 2 months at the most to preserve the motor and help air flow.On some properties the builder installed too small of duct lines for the air flow and run to the vents anyways so any little air flow restriction will make the unit hard to keep cool in the hot weather.Probably too much info but thought I would share.Hope it helps.

So I called her and told her that I don't allow any smokers in any of the apartments, she said she has just quit smoking and in any case doesn't smoke inside the house.