I have about 13,000 in cash, the foreclosure I am expecting to be worth around $200,000 once in good condition, hopefully normal maintenance is all that is needed (i.e. cleaning moss of roof, landscape cleanup, paint, etc.). 

Mortgage, taxes, utilities, and maintenance.

But I also understand that this increases risk, as all 6 houses still need maintenance, etc. 

I work full time job and handle my 4 units myself, maintenance management remodel, you would not believe how many people that have told me they used to have rental property and got rid of them, to much hassle, never made money, etc. 

Details below: Contracted Purchase Price $275,000 Seller agreed to finance 20% down over 5 years and contribute $2k towards closing costs Building needs no works as the current owner has fully remodeled each unit including new roofs All units currently rented, approved for section 8 (if needed), and is current on all licenses/city inspections20 separate parking spaces that can be rented each month for additional income (currently bringing $150 per month)Coin-op laundry on site bringing in approx $175 per monthSee below for property evaluation: Scheduled Gross Income           $92,880.00Less 5% Vacancy Rate              ($4,644.00)Gross Operating Income            $88,236.00Less Operating Expenses Taxes              ($15,179.00)Insurance        ($2,645.00)Water              ($2,400.00)Sewer/Trash   ($6,000.00) Mngmnt (7%)  ($6,176.52)---plan on self managing but need to allow for it Maintenance   ($4,411.80)Total Operating Expense           ($37,022.32)NOI                                             $51,213.68Cap Rate                                    18.6%Our lender does not want to allow us to use the full 20% from the seller.  

Normaly you would capitilize rehab cost but not ongoing maintenance and repairs.

For the true commercial portfolio loans like B2R/Colony, they typically have a yield maintenance prepayment penalty in addition to a release price per property that is 1.2 the loan amount.  

One of the units is a 3 bed but to be safe ill just keep it at the 2 bed price Here are the #'sPurchase price = $85,000   Down payment (25%) = $21,250  Rehab = $25,000  Closing = 3000  ARV= 115,000 - 125,000 out of pocket expenses = $49,250Total investment = $113,000Gross monthly income = $1,940Monthly expenses:  Utilities = 400   Vacancy (10%) = 194   Insurance = 100   Property tax = 167   Maintenance = 200  Maintenance reserves = 200  Management (myself) = 100   Principle & interest = 328Total monthly expenses = $1,689Monthly Cashflow = 1940 - 1689 = $251Annual gross income = $23,280   Annual expenses = $20,268   Annual cashflow = $3,012Cash on cash return = 3012 divided by 49250 = 0.061 = 6.1%ROI = 3012 divided by 113,000 = 0.027 = 2.7%Using the 50% rule this works 1940 / 2 = $970 - P&I $328 = $642Using the 2% rule this works 1940 / 85,000 = 2.3 % or would i use 1940 / 113,000 which almost meets the 2% rule at 1.7 %Thanks Guys!

They do not like rehabs or older buildings with higher upkeep and maintenance headaches.  

I want it to be low maintenance which is why I'm considering a condo/townhome.