I have to agree,those numbers are terrible.You can do much better and should get at least 10 to 12% COC by looking elsewhere like Cleveland or Indianapolis for a duplex or triplex.If you can't raise rents and/or lower your repairs to 5% due to old or deteriorating condition,let someone else eat this turkey.

Average-Good condition)Rehab = About 20k will meet with GC to get better estimates In to the house = 70k (not sure if this comes after total expenses or not.. sorry)Holding Cost (estimated 4 mo ) = about $4300 plus utilitiesClosing Cost = $2900Now in to the house (After 4 mo) = 77,200 plus utilitiesSelling Costcommission = $6600 (6% of 110k)(Maybe) buyers closing cost = 6,600 (6% of 110k) If I'm not missing anything and my estimates are correct I'm left with 26k minus utilities I hope this is considered conservative.

Theres other parts as well that say things like "I accept the house in its current condition"......I don't have it in front of me but I remember that it was VERY specific on what the tenant could and could not change about the house, which I understand but it just seemed off to me.

You are looking at market value based on market conditions.  

Now all insurance companies have conditions of improvements requirements.

Basically, we agreed to rent to a family with less than perfect credit with the condition they pay a $3,000 deposit (house rents for $1,200 per mo).  

I don't recall out lawyer pushing to get this particular condition into the contract.

There's three single family homes all in great condition and much nicer than the apt buildingsI'm meeting with a bank president (family friend) tomorrow to ask general advice and discuss the deal.

Or, they must present an Approval Letter showing they are unconditionally approved for a loan; this must be verifiable because we will be contacting the lender directly by phone and email.The success rate of reaching closing is much higher if the real estate investors require, as a condition of accepting the purchase contract, that his C Buyers are Qualified End Buyers by my definition above. 

According to IRS PUB 527:Repairs (Expenses): A repair keeps your property in good operating condition.