If he doesn't keep good records, then you have a bit of a problem, and will have to calculate it yourself.Finally, with all the information you've collected, you determine if it is a good deal or not.Based on what you listed above here's an example ballpark monthly budget:Principle & interest: ~$1,000 ($195k loan @ 5%)Taxes & insurance: $300-500/mo (depending on your locality)Utilities: $200/mo for water (most 4-units has the owner paying water)Vacancy: $140 (based on 95% occupancy at $2800/mo)Maintenance/Capital expences: $280 (standard 10%)Management: $280 (10%)Total: ~$2,300-2,500, leaving you with a profit of around $100/door, with only $10k invested. 

@Edisson CasseusOkay the you can definitely go 3.5% down for FHA standards.

My question is, Operating agreement is based out of the real estate strategy or standard for all types of strategies.

I had thought about adding an addendum to my standard purchase and sales agreement stating that if i cleared the lien the seller would be obligated to sell me the property for the agreed upon amount I just don't want to risk shelling out 5 - 15K clearing someone else's lien to only discover that I can't force them to continue with the original agreed upon contract.Any suggestions or anyone with experience clearing city / other liens on properties would be greatly appreciated.Jason

My question, are there standard lease to own contracts I should use?

The HELOC interest would be deductible.

Sounds like they don't pass your screening standards...

I believe it is easier to find the worst houses in a neighborhood and bring them up to the surrounding standards. 

I use a servicing company for monthly payments and deduct TI.

This is when HUD build standards were released on them.