Question for the experts: is there any reason to not accept prepaid utilities and monthly pet fee?

Cash flow = Rents - PITI - Expenses (Property Management 10%, Vacancy 8%+, Utilities, Repairs and Incidentals, Capital Expenses fund, Legal and Accounting)9.

I've moved into one side and am loving the area but I need to rent the other side soon to actually start having the building (slowly) pay for itself.The duplex has almost fully separated utilities except water.

Midwest prices can be as low as they can get but till high growth industries don't move there we will continue to see a migration away. 

We had already extended closing by thirty days at this point for due diligence as the property was industrial land the we plan on converting to residential development, so environmental revue and such needed time to come through. 

The main reasons I am not in the pawn shop industry today is I don't want to stand behind a counter 8-10 hours a day and I don't want employees!

You may want to find a market with at least three forms of industry.

I charged 10-15% higher than what I would have gotten on a regular tenant as well as them taking utilities and furnishing (like a normal tenant would).

Here are some preliminary numbers I ran: 260K FHA no repairs and current rents on left, 300K 203K, reno and higher rents on right: % Down Payment 5.00% 5.00% Down Payment $13,000 $15,000 Remainder of closing costs $3,000.00 $3,000.00 Total Due at Signing $16,000 $18,000            Mortgage Rate 4.60% 4.60% Length of Mortgage in years 30 30 Monthly Mortgage payment $1,266.00 $1,461.00 Taxes $386.00 $445.00 Sewer and Water $50.00 $50.00 Trash $50.00 $50.00 Heat/Utilities $ - $ - PMI $ 180.00 $ 208.00 Cap Ex and Ops $200.00 $200.00 Insurance $65.00 $75.00 Mgmt Fee $165.00 $165.00 Vacancy $132.00 $132.00 Total Expenses $2,494.00 $2,786.00     Unit 1 $500.00 $700.00 Unit 2 $900.00 $1,100.00     Total Revenue $1,400.00 $1,800.00     Cashflow/month ($1,094.00) ($986.00) Cashflow/year ($13,128.00) ($11,832.00) Cash on Cash Return -8.42% -6.57% I have not talked with the seller in detail yet, as I want to see if this is worth a deeper dive first. 

As long as you are in the same industry then the 6 month rule applies.