Purchase price: $242,500 Cash invested: $49,000 This is an older house, built well on concrete block, that is next door to multi-million dollar houses on the water.

Water heater 12 years to replacement (may need some service before replacement).Recognize many cap ex items are years away.  

The main issue with rental basement is water if it has water issue usually it is a simple fix .Clean gutters ,discharge gutter  water away 10" away from foundation, make sure you foundation soil is slopped away from it .If you need to buy soil get a clay mix .Cut back any tree too close to the foundation look at the drip line that's how far the limbs are out from the tree .If all that is done still has water buy a sump pump  carry the water to day light away from foundation 10" to 15" .

@Albert Bui @Carlos Valencia There is no offset when you live in the 2-4 unit remember its a full HIt to your monthly PITIA and yes you can use the rental income but only as an addition to your qualifying income, you're still taking a FULL hit on the PITIA.Its only offset when you vacate or move out or it has already been converted to a rental (pure investment/non owner property). 

From purely a lending perspective, the projections from AirDNA and Rabbu are the only commonly accepted sources for underwriting a short term rental purchase or refinance DSCR loan.

Generally, tenants don’t have the right to demand relocation for purely cosmetic improvements, nationally. 

Water services.

Las night, she sent a text (along with a video) showing that the hot water doesn't come on from the kitchen faucet.

(Current cost to bring in water line is around $140k or a well starts around 40k with no guarantee of hitting water) What made you interested in investing in this type of deal?

It's probably a vent pipe for a furnace, water heater, or something similar.