I am selling a 3 unit historic property at about 5.5x gross in Springfield, Vt.

This basically means that your expected monthly gross rent should be at least 1% of the sales price-talk to several different realtors and PM companies to get realistic expected rent.

The gross rent is about $23,000 and after all expenses make around $7,000 but keep spending everything and putting right back into business and are area is really appreciating.

CMHA also requires the tenant's total monthly rental amount to fall within an acceptable percentage of their gross monthly earnings.

So, in fact, your rental gave you 2.1K  (1K in cash flow, and 1.125K in tax savings from other income).Of course, this is actually more complicated as the income above is the AGI - adjusted gross income = an individual's total gross income minus specific deductions, the tax % corresponds to your tax bracket, the deduction applies to 100K income, gets prorated up to 150K and then you can't use it (if you make more than 150K AGI, you'll not be able to deduct the rental losses...unless...and there is layer after layer of complexity).So, yes, depending on a carefully alignment of stars, you can have negative cash flow and, due to your specific tax situation, end up saving money.

Thats 19% more gross rent you will actually keep.

The addition of apartments by the original owners for each of the 7 kids was a conglomeration, so we nicknamed it the the Frankenstein house.When we closed on it only 3 units were rented grossing $1350/month (if they paid).

@Ashish Acharya Yes the return on the property could average a gross 100k a year!

Other than title work you will need a Deed of Trust (recorded document that shows that you owe money to the prior owner and the gross amount) and a Promissory Note (document that shows when & how payments will be made). 

Most flippers in Milwaukee make only 10-20% gross profit - and they usually don't touch systems that have some life left and will pass inspection (like plumbing inside the walls), which as a long term owner you want to take care of as long as you have the walls open - and not come back in 5 years and rip out the brand new kitchen..