This approach has many benefits but you need to layout your plan and also be able to adjust as laws and technology change and equity grows. 

We meet with potential clients and often either have coffee & donuts or sometimes cook and have lunch with them so they can see how different layouts, appliances and cabinets function to see how well it might fit there needs. 

Hi Shane,Thank you for the layout plan.

As long as the layout will remain exactly the same, you shouldn't require a permit for remodeling.Now, Boulder, being Boulder, may require a permit for something like painting the house.If a permit is required and you don't get one, it can cause lots of problems down the road when you try to sell.

The point of this post is that I'm looking for efficient ways to grow further, but first let me lay out where we stand currently...

If you really like this tenant and you're interested in keeping him around this seems like a pretty easy concession to make as long as you lay out clearly defined expectations (for both sides) and he follows them.

all great advice. as long as you are purchasing below market value, you can refinance and pull out at least your down payment back. then repeat the cycle again. some lenders seem to frown upon investors with multiple loans, yes, but a refi is easier to get than an initial loan and without the cash layout. my advice, refinance each deal to pull out as much money as you can from each deal. after all, the tenants are paying the payments for you, so does it really matter how much you owe???

These do rent as well, but things are changing:  there are ~120 new apartments coming on-line in the are of town (last of 400 in the past four years) which is causing an increase in vacancy for older properties ... particularly those not being maintained.If you screen well, lay out the house rules up-front, and provide good service, student rentals can be rewarding.

I helped him put together a very quick word document to map out the numbers (nothing professional) just something to get organized and layout all the numbers.

The house directly behind his, which is very similar to the subject property's layout just sold for 358k with an updated kitchen and master bath.