Its not cheap to have a property demoed in Detroit, Ex.  2100 sf , two story, between two existing homes will cost approx. 13k, without asbestos and lead remediation - it will take 60-90 days to get utilities terminated, and proper permits issued.

One has much more capital to put in for a down payment than myself and the other friend, and he is not opposed to utilizing his greater capital to get us into a larger property. 

Landlord pays for oil, water/sewer and trash.If we end up acquiring the building, we would somehow want to pass the heating cost to the tenants for new leases.One way would be to implement RUBS (utility bill back to the tenants based on sq footage of the units, # of occupants, etc).Another way would be to convert to electric heat.

Has anyone tried to utilize a rental property mangement company for this purpose?

@Josiah Kay tenants pay all utilities.

To best identify true value, I would look on the MLS or utilize an agent to pull comps for current condition and ARV comps. 

I'm a big believer in direct bookings but you'll need to utilize the existing marketplaces first to gain traction then invest in your own site.

It is better to price out the things you will know in advance like insurance, property taxes, management, utilities etc. and use a much smaller percentage for unpredictable things like repairs.

Purchase price: $197,500FHA 3.5% down: $7,000Mortgage, taxes, Insurance: $1,5352 Bedroom rent: $1,1001 Bedroom which I'll live in for a year but could rent for $850Barber shop in building: $650The only thing I pay for is heating which was $2,000 total for last year the rest of utilities or paid by tenants.My question here is with me owner occupying I will clear $215 but once I move out I will clear $1,065.

Utilities ?