They are expensive, but a good resource and can usually close quickly (which can be a necessity with many deals).  

What are your thoughts on the pros/cons of making another principle payment with the extra cash from your roommates rather than using it to pay for the operating expenses and capital and living for free that way?

Everything is really expensive right not so not the easiest time to buy but if you find a deal that works it shouldn't stop you.

The deal is as follows: Eightplex in Hickory NCAsking price $210,000 (trying to get it down to 150-170k, but am using 210k for the numbers) Gross rents: $2,900/month or $34,800/year (Between $330-400 a door) Tenants pay all utilitiesI am requesting a 1040 schedule E and the T12's from the seller, but for now am forced to use the 50% rule. using that, operating expenses are $17,400 NOI: $17,400Cap: 8.28 Debt Service: $8,700Equity Dividend rate: 16.5% The area isn't great or terrible, probably a C or C+ area.

But this is the same thing as giving money away as expenses increase at a certain % every year.

Yes those are out of pocket expenses no matter what.

It seems like leaving it out would under-value the real estate investment opportunity, especially if you are comparing it to a different asset-class (like stocks) that don't give you that phantom expense write-off .Thoughts?

If yes,keep it and let the tenant follow their pipe dreams of home ownership somewhere else.Don't make their problems yours.If she needs section 8 to pay her bills,she can't safely finance a stick of gum let alone your property and you'd be headed for a long an expensive foreclosure before long.Now if YOU need to sell because you can't afford to repair it or it will need major repairs like a new roof,appliances,etc. and you haven't been setting aside money every month to pay for them well then that's different.Put it on the Bigger Pockets marketplace and let one of us buy it from you and relieve you of the burden.Good luck.

We too like the $50k range, though you can get a couple juniors for the $30k range, though we always keep $5k in reserves for expenses & foreclosure if needed.

Property is in good physical condition but there have been some expensive repairs and all the utilities seem high to me.