The current owner does not live in the area and is not involved with the operation of the building other than working with a local pseudo property manager.

But I like the idea of interviewing your PM to try to get an idea of how they operate and what their philosophies are.My best friend is a retired police officer who started his own property management company.

reviews and will not ping you in general if we have that or similar).SUPER EXTRA BONUS HINT: You already moved those down payment funds from your "business" checking account into your "personal" checking account 3+ months ago, so I'm not going to have to ask your CPA to write a letter "promising" that the use of "business" funds for your down payment will not impact your business operations (mini hint: no reputable CPA is going to write that letter FYI, see above about insurance...).Your self-prepared ("stated income") 2019 YTD P&L shows that you're doing even better than you were in 2018 or 2017.If you did ALL of the above including the super extra bonus hint: Then I'm over 60% sure that your 2018 taxes will be the ONLY basis of your income calculation, assuming of course an above-average competence lender local to the state where you are buying real estate.

They will have normal operating expenses, but they should also have a reserve fund for repairs. 

Does this amount paid to decrease mortgage consider against capital or against operation profit?

It just has to be operable with a low amount of work & additional funds required for you to stabilize. 

The 25% down payment is no problem for a conventional loan, but until it is occupied and operating well, I wanted to reach out to the BP Community to see what other expenses I need to account for right from the start until it's occupied.

I'm not a lawyer or an expert in asset protection so we'll just say that we're officially out of my depth on that topic :)It sounds like you've done very well so far, why not just keep doing what you've been doing, while leveraging experts to improve your business operations?

When evaluating a property, do you subtract Capex reserves from your operating cash flow when calculating cash on cash returns?

Yeah, I guess it isn't any different from what anyone who operates a normal business such as a Dominos franchise has to deal with.