Does the Hoa even allow rentals, What are the reserves for the capex items.

This are has no HOA and there are other lots in the area for sale. 

An HOA or the government can seize your property if they believe you have violated rules or laws. 

For expenses I use the tax rate (2.25% in Austin for example), HOA, Insurance, property mang fees (8%), and mort P&I. 

They had an HOA lien and a judgement against the property but were not in foreclosure.

Doesn't sound like there's an HOA to bail you out here.

Very doable if you don’t have an HOA or have one that will allow this.

(vacancy, maintenance, capital expenses) Any chance any of these have HOA fees?

Your expenses will be the HOA fee, insurance, property taxes and mortgage payments.If you bought a 2 bedroom unit for $340K, you will be paid monthly $340K X .1 = $34K/12 = $2833.$480 (HOA-includes utilities) + $150 (Insurance) + $500 (property taxes) = $1130If you borrowed 75% of $340K = $255K, your mortgage payments will be ~$1145/month at 3.5% over 30 years.$2833 - $1130 - $1145 = $558 cash flow/month with nothing being put in reserve for future repairs and replacementsThen, when the 2 years are up, you have to allow them to manage it, and your split with them will be 65/35.Your breakeven rental income/month based on the above will be about $2500 (putting aside ~$225/month as reserves)Based on that your unit will have to generate at least ~$3900/month in income to break even from a cash flow standpoint.I think I am close on the numbers above, and I don't think I missed something (but it's possible!). 

I did have a few rental inquiries from 3 unrelated tenants for my 3 bed townhome and had to tell them that I couldn't rent to them per the regulations and it was apparent they had already been renting together in Denver so obviously, not all landlords adhere to that but I had to per the HOA especially.