using 80% LTV without including closing costs you can purchase a $500k property.  

The major factors like the roof, furnace, plumbing, electrical upgrades, and foundation repairs are all examples of costly expenses you'll want to inspect before closing the deal.

First question is who owns the house and before Dad passed how did they set up or record the Life Estate.

Plus the cost of most things goes up over time.

@Yonah Weiss is an expert in cost segregation. 

My thoughts from the little I know about the raw numbers however:1) You have no reason to not raise the rent at least a small amount to compensate for the extra cost of ownership the past few years.

Just to give you an example of the type of thing you'd be potentially looking out for, if the community has a pool terrace planned and it's orientation in the new building would face directly towards your property, that could be a source of significant noise and disturbance for you/your tenants, and could make it much harder to sell your property once the new building is built and occupied.On the positive side, new apartment buildings cost millions of dollars to develop and build, and developers really only sink that much money into areas where they're forecasting rent growth and property appreciation for their investment.  

And then closing costs...of $10k?  

The Developers want this setup because they don't have to come up with capital to buy the land.

My recommendation would be to own residential first so you have a much better understanding of the costs to own real estate.