I would assume that the buyer would do this (option 2) what period of time is usually allotted for this?

I can only speak for Miami, but I would say YES it makes allot of sense down here.

But why am I allotting the first 50% to expenses every month, if I am spending 850 month on this property or any property it doesn't sound like a sound investment.  

If they finished in under the time allotted then great for me I pay less, if they go over then I pay up to the capped amount.  

It does sound like you will be replacing a lot of high-value items soon, so definitely make sure your cap ex allotment is coving for that.

Allot of owners do not live on island so properly managers are a necessity.I was hired to clean and do check ins since the guests pay me its not a problem.

Since only an average of $222 is applied to principal on an $8,000 purchase, this is their monthly rent credit allotment

He has a live in tenant who handles vacancies for a small fee on a case by case basis and a maintenance man on call which is way cheaper than what I have allotted for property management which will help with expenses.  

I believe 8 is the limit for mortgages allotted under a single investor.

I found this forum after the name popping up allot on another forum I belong to.A little about me.