If you have to fudge then a variable of 10-20% in size can be used based on Square footage and distance.

A cash-out refinance may not be a bad idea especially if the home is already paid off and on top of that, most HELOCS are variable rates. 

Monthly Insurance - 106 (google Insurance plus flood insurance)Other Expenses - 157 (taxes based on MLS)Variable Land Lord Expenses Vacancy (% of monthly rent)- 112.5 (5% of rent, Bigger Pockets recommendation)Repairs and Maintenance (% of monthly rent)- 112.5 (5% of rent)Capital Expenditures (% of monthly rent)- 182.75 (8% of rent)Management Fees (% of monthly rent)- 247.5 (11% of rent)Future Assumptions Annual Income Growth % - 1% (i just looked up Honolulu’s inflation rate)Annual Property Value Growth % - 5.59% ([CAUTION] https://www.neighborhoodscout.com/hi/kaneohe/real-estate [CAUTION])Annual Expenses Growth % - 1% (same inflation number)Sales Expenses %- 7% (bigger pockets estimate for a real estate agent’s sales expense % which included closing cost and price for a deep clean of the place prior to selling)

@Brooks Gagnon- thanks -  great  question and lots of  differing opinions ....I think this  depends on  several variables  1) plans for the future ...buying more ...needing to rehab  etc ....2) ROR on the  funds  you can park somewhere   3)   hard money  pricing / cost / rate and  duration .....in general - as  hard money loans are normally short term loans - I would prob recomend using your own funds to get the  deal in place and then  either  refinance it  to replenish the funds  or sell the  proeprty for a gain ......if you  are able to  carry the  financing longer term   or get  more conventional financing - using OPM  might be a  better  choice - good luck

There are some pretty big variables here that make it impossible to answer this question.  

I’m not saying you’re not capable, but there are a lot of variables you’re providing before you can rent the units.I recommend finding another property that doesn’t have as many issues.

I know the cap on ALE the family has through insurance and it's generous, but as we all know, there are many variables to when the resident's home will be repaired.

I think the reasoning is sound from your friend based on your wants but don't like having a bunch of variable rate debt funding the passive investments especially because if the market changes bank can pull those LOCs out from you in a hurry and you probably are on a 5 year hold commmitment on the passive investments. 

The unknown variable for me right now is the quality of tenant piece and management.

contractor quality work and price is always variable and it's often difficult to predict who's going to do what.