So for a very hypothetical and generic example:Purchase Price: $100K ($20K Down) / Closing Costs + Misc: $5K / Rehab: $10K = Total Cash of $33KIf the property rents at the 1% rule, or $1,000 month and your able to cash flow $200 month, you'd be splitting profits 60/40 let's say with your FIL.

It has all of the instructions you need.You may only do this if:They are not currently in a term lease (ie, they are month-to-month, not under a lease that has yet to expire)You give 60 days noticeYou pay them 1 months rentYou actually intend to occupy the unitYou do NOT rent it out again for at least 12 months, even if your situation changes and you move out again.You can find the form here:http://www.sjto.gov.on.ca/documents/ltb/Notices%20...I also highly recommend you read the actual rules about it here:https://www.ontario.ca/laws/statute/06r17#BK65In fact, read that whole document if you're ever going to run a rental property.

What I am trying to determine here is a "rule" of my own to use when evaluating potential leads and if this is feasible. 

Second the reinvestment rules will catch ya.  

I’ve been told to ignore the 1% rule, but I’m sticking with it because it makes zero sense  to me to buy something that a) won’t cash flow well and b) is 30 years old and requires conservative repair and capex estimates.

I suppose it depends on your specific investor identity and situation but probably not. 

This situation may related to the poor regulation or rules.

I have found many older setups like this don't meet the current rules of one acre per septic system. 

If you decide to keep it you might need to work on your master lease items that includes all of your rules. 

I can't remember who it was off hand, but there was a guy a few weeks back talking about how he gets closer to $1000/door and doesn't want to touch anything below that...I just looked up some properties really quick on loopnet (not sure where else everyone checks first), found some properties that would fit the 1% rule mentioned on BP and that would appear to clear more than $200/door after management fees and setting aside $100/mo for reserves.