There’s an incentive for them to get as much profit out of it as possible since he’s only making a dollar on anything above $25kIf he’s double dipping that’s a different story entirely.

Like what @Danny Randazzo said, double check what you consider "market" rents. 

Apparently they would put two people in each bedroom and have a live in, full time, house manager.

I would take that $40k and identify an area that is up and coming, near a college, university or employment draw, and purchase a small condo as a rental. 1 Bedrooms or studios make excellent rental investments. 

I’m doing a mini version of a BrRRR - r for small rehab :) on a fourplex and it’s amazing how people are so surprised I’m paying cash up front and the return is low, blah blah blah and they just don’t seem to ‘Get It’ that 6 months down the road I’ll refi and move on to the next one!

It appears all these shacks - particularly the ones on the lake - have already been renovated and updated for full time living = 3+ bedrooms.

Trust me when I tell you that its not easy to find quality properties that give you any double digit returns.

I am looking at a deal just north of Houston that is 2 4-plexs on 1 lot, and I wanted to double check on cap ex and maintainence numbers.All city utilities, flat roofs, built in 1966, updates have been done, some new ac’s.

I had 72 people interested in seeing my 2 bedroom apartment in the first 24 hours here in Berwyn last time I tried to rent it out!

Here's the number.4 bedroom, 2 bath, 1920 sqftComps give me a conservative 250k ARV, in the last 6 months, within a .50 mi radius.