Although cashflow is important, it is now always the only component to consider when looking at a long term real estate strategy.

@Sunny C. one thing I did not see mentioned on this or the other discussion you started is that I *think* of your IRA is involved in a project in any way then you yourself are not allowed to participate in the labor component of it at all. 

I understand structural components, city code, foundations, going rate for trim, paint, drywall, roofs... you name it. :-) just haven’t been on here in a while, due to working.

needs to be documented by them specifically if you want to consider a payment, and never as admission to anything but only as a component of good will. 

In addition to the above, there is a $2500 down payment, is this a mandatory component for any deals or this can be something that we can give only we have got a good buyer waiting in line? 

I would use 10% until the property is inspected to determine the current condition of all major components and appliances.  

@Josh Sullivan Your greatest challenge will be where your weakest component is.

You did not include anything for CapEx (5% to 10%) depending on the current condition and life expectancy of all major components and appliances.  

@Harrison CookYour post kindles lots of questions.In the "good old-days" most heating systems were vastly oversized for the building they were heating - energy was relatively cheap, insulation was non-existant to poor ... so it was easier and safer to {drastically} oversize.Today, while energy {in North America}  is still relatively cheap for the moment,  we have a much better understanding of how to make buildings more efficient {though you might not think so looking at the construction industry in the U.S.A. and Canada}  and there are often more cost-effective measures than simply replacing an old, over-sized heating plant with a new, over-sized heating plant.You really need to - or at lease should -  perform a heat load analysis to properly size your heating system, a component of which, is determining the rate of heat loss of the building envelope.  

It's just not how the financial world looks at investments...CAP is a component of "commercial" residential multifamily...5+ units. 1-4 unit properties are often classified as single family (This is how Core Logic classifies 1-4 units)...The properties are valued by comparable sales method.