@Andrew GarrettI’ve been investing in NC for a while, the main issue with Raleigh is rents are low compared to costs of homes.

I also suggest that the tenant install a camera that stores videos of the driveway, then when tenant has proof, you can send notice to owner next door that he is to eliminate hazards he is creating, or you will sue for damages, especially if it costs you tenants, as they can’t afford and shouldn’t have to deal with repeated damage.

Was the owner doing his own repairs and hiding the costs?  

Blake, I am a Waco local, have worked as a project estimator for Belfor property restoration, remodeled homes in Waco, and have local insight to great General Contractors as well as specific tradespeople. 

I will say REPS is one of the areas of the tax code where it is very costly to get wrong.

In Milwaukee, I'd need 2 exits from the attic and 50% of the space has to have at least a 7 foot height on ceilings.Two things you want to check: both requirements are correct, but on top of that the city is getting reluctant permitting 3rd units: 50% more occupants mean 50% more water and sewer and 50% more traffic and parking.The other issue is that the cost of finishing a thrid floor with proper insulation/ventilation will run about $50-60/sf and only makes sense if you can get strong rents. 

What's the cost?

The below is the closing costs breakdown the lender has provided.

Also, I want to ask how to estimate the rent for deal analysis.

Run some estimates now on potential future earnings if, at some point, you didn't live in the house and instead it was used as 100% rental.