The seller has sent me an excel file which is basically a pro forma income statement.The monthly numbers are as follows:Income: $5700Repair & Maintenance: $200Insurance: $200Property Tax: $800Gas: $100 (seems low to me for an 8 unit)Electric: $100 (seems low to me)Water: $75 (seems low to me)Garbage: $60 NOI: $4165 Is this missing any numbers that I should be including (beside) debt service?

Maybe the tenant pays these.According to your pro forma, your project cost is $53k, but the after-repair value is $40k.

I have learned the hard way after buying them that there are real costs involved in owning these types of properties, regardless of my pro forma projections.Owen

I noticed early that pro-forma's either underestimated vacancy, taxes, or both.  

Pro forma taxes are adjusted on current revenue to 80% of the sales price. 

But as you're now realizing, they'll be harder to find, because you'll be competing against owner-occupiers (ie. emotionally attached, getting lower interest rate, so will pay more) in those markets.Always keep in mind though that a pro forma cap of 6% for residential property will NOT assure you of a good "deal".Rule of thumb: WHATEVER the market value is carefully worked out to be, offer no more than 70%, maximum!...

should I go ahead and form a LLC?

I would really look to form a strong relationship with an agent who works with investors that really knows the areas--probably your best bet.

@James Chambers : obvious question: did you base your numbers on a pro-forma given to you by the seller/broker?

A couple friends and I were putting around 5k-6k each towards two properties as our first Real Estate investment (non-primary residency). I have the best credit score of the three, so I will likely be the one to secur...