What are the expense assumptions you entered in the calculator? 

I've played with the rental calculator some, but I'm a little shaky with some of the assumptions. 

Your metric of 10% ROI contains some assumptions based on cash flow, appreciation, or both. 

Down payment of ~$33K.Pro of Cheaper rentals:1) Scales much faster2) Lower vacancy risk3) Lower vacancy carrying cost.Cons of Cheaper rentals:1) Lower quality tenant pool.2) More maintenance risk.3) Higher maintenance turnover costsPro of Higher priced rentals1) Higher rents2) Assumption of Higher quality of tenants3) Higher probability of appreciation4) Ideally less worry overall5) Better use of 20% Fannie mortgage for properties 1-4 (6?

For vacancy I'm conservatively budgeting 10%Based on the above assumptions, I'm modeling out potential investments.

As a note investor we would base our yield assumptions on the balloon being extended.  

There are a number of assumptions made that I think make this deal very risky. 

So, here goes...Assumptions:1) Sale price – adjusted basis = taxable gain2) Adjusted basis = Orig purchase price (plus) improvements (minus) depreciation (minus) insurance collectedTherefore: $190,000           Purchase price in 2000+ $6,000             New roof-$108,000           Depreciation ($6k x 18 years)-$200,000           insurance from loss+ $17,000           improvements after loss-$95,000            Adjusted basisSale price – adjusted basis = taxable gain$200,000 – (-$95,000) = $295,000$295,000 * 15% = $44.250So my main questions are as follows:1) Is my logic sound?

You will also learn how to underwrite and make proper assumptions. 

So, here goes...Assumptions:1) Sale price (minus) adjusted basis = taxable gain2) Adjusted basis = Orig purchase price (plus) improvements (minus) depreciation (minus) insurance collectedTherefore: $190,000 Purchase price in 2000+ $6,000 New roof-$108,000 Depreciation ($6k x 18 years)-$200,000 insurance from loss+ $17,000 improvements after loss-$95,000 Adjusted basisSale price – adjusted basis = taxable gain$200,000 – (-$95,000) = $295,000$295,000 * 15% = $44.250So my main questions are as follows:1) Is my logic sound?