We estimated that it would take about 4 months, more or less, to finish and sell, and that would generate $250k in profit for me, more or less.

Always place the health of your business ahead of the individual.

He's the brains, lead generator, agent, and property manager of the operation (I trust him completely, he's a rock star), I'm basically providing the money. 

I copied this from a search on real estate ROE:Return on Equity (ROE) ratio calculates the amount of return generated in a particular year on the total amount of equity invested (or trapped) in a property.The amount invested (or denominator) is calculated as the initial investment (down payment) plus the entire increase in net property’s appreciation and the entire decrease in outstanding loan balance incurred prior to the year the ratio is being calculated.Cash-on-Cash Return is a similar calculation, but since the two draw backs of the traditional Cash-on-Cash Return are that property appreciation and principal debt payments are not factored into the formula, Return on Equity adds these two components to the traditional Cash-on-Cash Return calculation.A property’s net equity increase is calculated by determining what the “Net Sale Proceeds after Taxes” would be at the beginning of a year, and then again at the end of the year.

Both units have two entrances and individual kitchens.

It wouldn't be a legal bedroom to rent to others that way, but two individuals in a one bedroom is common, just usually is a couple or parent and child in the one room.

The houses are cash flow generative so I would be able to pay down a higher than normal principal % every year. 

Partial doc lenders are private lenders, not freddie/fannie insured so the rates are higher, but they're willing to work with self-employed individuals more readily. 

Many of the small complexes are owned by older individuals that do not know what what they are doing and tend to be motivated and might do owner financing. 

The building for sale is exactly like mine so I’m familiar with many of the standard cost (insurance, taxes, hoa, general repair cost).The seller list in his remarks that it has a 9.2% cap a couple different times.First off, the auto generated cap rate from the MLS doesn’t even list that, it lists 7.64 based off the numbers entered into the listing.As far as the numbers entered:The income ($33,060) minus expenses ($8,965) does not even equal the posted $21,000 NOI.