You can value these homes on a blue-book or GRM (gross rent multiplier) but definitely do not cap their income. 

Furnished, gross leases, put a little effort into matching roommate personality types and you'll be fine.

Your business income doesn't have much to do with valuing the asset so figuring out market rent can get you to gross income which can get to NOI for the income (direct cap) approach. 

The gross rents total $1,575 and produce a NOI of $700 per month.

Gross profit was about $25,000 and I learned a lot.

@Ed KowalchukThey get reported separately on the K-1 that would be reported to you.You would be allocated dividend income along with capital gains(if you sell the securities) along with rental income/(loss).Your individual return is a chance where potentially you can offset the two when you calculate your adjusted gross income.

Now, some banks would only count 75% of the gross rents to account for maintenance and expenses, so if your properties barely cash flow then you may find yourself in a pickle. 

Here are all details:-Orig. purchase price = $120K-Current value = $55K-$60K-Balance owed (1st & 2nd mtg) = $105K-1st mtg pmt = $685-2nd mtg pmt = $180-Monthly HOA = $400 (I know, this is freakin ridiculous)-Monthly rental income = $747 (net), [after 6% prop mgmt. fee on $795 gross rent]-Net monthly cash flow = -$518  (I haven't been paying the HOA for many months now, so I'm currently operating at a -$118/mo loss, although the overdue HOA dues are just piling up)Goes without saying this is a bad situation...what should I do and what are my options?

Can you tell me what the total gross rents are now?

, there is an unavoidable cost in both time and money to:screen and approve tenantshold lease signingsreceive monthly payments and handle non-paymenthandle repair requestsmanage lease renewalsI'd suggest 8-10% of annual gross rents as a reasonable annual management expense.