Make sure to allocate some expense to vacancy lost, management, maintenance, tax, and insurance.

For any financing, you still underwrite the tenant no differently than if it was a 3rd party tenant.Talk to your CPA about allocating capital costs between LL/tenant, whoever has a higher rate will probably absorb more of the costs.

I knew where the "budget" was best allocated.

And from his analysis he allocated 1% for property management so that’s his job whether he likes it or not.

In addition to this home, we have approx 30k in savings allocated for the business as well as access to about 115K in private funds (my parents recently sold a piece of land and are willing to invest in this business ( more details below). 

This broker/agent clearly values their time and the other 2 agents sounds like they are desperate to do a deal and have nothing else going on.The bottom line is if I find a deal as a broker such as this I wouldn't sell it for a paultry commission.I would lock the deal up myself and sell it to the highest bidder for a much higher spread.Example 50,000 property worth 100,000 when fixed up.Crappy 3% commission 1,500.Instead lock up to highest bidder at 60,000 and make 10,000 instead.If the investor balks about the fee there will be 10 more investors saying " I don't care what you make I just want this deal ".Investors sometimes get the big head and think they are the only game in town with cash.I can assure you this is not the case.As another broker I know in New York puts it " I work with a bunch of investors.The ones looking for good deals that I have a reasonable chance of finding go to the top of the list.The investors wanting amazing deals I still look out for but go to the bottom of the list in time allocation.

I couldn't allocate a large chunk of time to marketing such a property without knowing the sellers were 100% committed contractually.Every piece of business I take whether it is a buyer or a seller I go in 100%.

Would a reasonable 8% of rental income as a property management fee be something that could qualify as self-employment activity, allocated separately from the overall rental income?

But the depreciation was in my corporate return and they were too stupid to just go to the individual property schedules and add up the depreciation that was allocated to each house.It was the dumbest thing I've ever seen.The kicker was they did it on the first one and had no problem.

We get allocated funds through different programs that we use to assist each client.... when it comes to sub2 agreements, we just link the homeowner to an interested party and make sure all the necessary paperwork is completed.