For instance, one partner has the ability and time to locate, fix, manage the property and the other has no time or desire but has the money.

The 50% rule simply says that throughout the United States, operating expenses run 45% to 50% of the gross rents.Here's how I would evaluate your example.Gross rents: $600Operating Expenses: $300NOI: $300Less $100 desired cash flowMaximum mortgage payment $200Therefore, with a 30 year loan at 7%, the maximum acquisition cost (purchase + rehab) would be $30,061.51 and as you said the max purchase price wouldbe $28, 061.51.Mike

Use some reasonable interest rate and whatever you want for desired cash flow and compute your price.Offer him a few options.

Because of the University the city will never really go away (fortunately).I've found a single family home that has been split into two units (upper/lower). 2 bd 1 bth in each unit in a very desirable part of town and still close enough to the University to be considered off-campus housing (after I leave and want to rent it).My intentions are to purchase and live in as a single family (for the sake of the credit) but keep the units separated.

Today checked on a property we agreed to have the tenant paint and pay for to meet her desires.

The criteria you provided will work really well for some very desirable areas of Richardson, which has an excellent school district. 

@Joseph Ball   OK Lake O is really not a hot bed of investor business.. but there are other areas of PDX that are desirable to cash flow folks. but its a 1% or a little less market with appreciation a reality.Thanks for the kudo's

Yes, condos come with HOA dues and you have to make sure the HOA is sound/well-run (of course), but they often are low-maintenance and you can find them in desirable areas perhaps with better renters. 

We plan on having kids within the next 3 years and my desire is to have my real estate foundation set, learning and networking as much as I can with the help of a mentor!

If I were negotiating to buy an entire portfolio, I would probably work from the least desirable unit and go up from there.