This is because traditional banks/lenders are going to go off the income you report to the IRS, which especially for small business is typically really low after expenses/write-offs (investors often run into these issues as well after investment property write-offs).

Not knowing anything about this property or area, the rehab cost seems really low for a house that cheap that is expected rent for 1600.

Since this is your first eviction, paying an attorney to handle it may be worth its weight in gold.  1.

2) 2% for repairs seem low for a 4-unit. 3) 2% for vacancy seems low as well. 4) i would go 10%-15% overall for a vacancy and repairs budget. dependent on area and tenant base.

Personally, I would put more weight on his criminal background check and past landlord references than employment history and credit reports.

Water bill looks very low for a 16 family and you will see higher expenses.

With an FHA loan and first time homebuyer credits, your out of pocket cost to buy will be surprisingly low.

This way you can get rid of low quality tenants quickly instead of riding out a year lease/evictions.

It's pretty easy to see areas that consistently get high rents and bad areas that get low rents.

You need to work with experienced local pros, if the margin is low.