When a PM does charge a markup, he's usually getting a discount on the service to keep the cost stable.

Negative cashflow adds risk. 

I would appreciate any positive or negative comments on your experience with this investment opportunity. 

It's an estimated cash on cash return given current rental rates subtract expenses assuming 7% interest rate, 10% management fee, 5% repairs, 5% capex and other expenses like mortgage, insurance, tax. it's a estimate to tell you what properties to analyze vs ignoreyou can see the are pockets of negative returns as well as pockets of positive return. this is to supplement the data @Devin Conley provided

It's a balance of cashflow and wealth accumulation.One of the goals is to have tenants pay as much of your cost-of-ownership as possible (loans, taxes, insurance, etc.)In high-cost areas, any Class A or B property you buy will usually negative cashflow for the first 3-5 years, until rents rise enough to cover the negative cashflow + rising taxes & insurance.Investing OOS increases your risks because you may not know the market and you can't check on everything/everyone all the time.If you move forward with your buddies, HIGHLY recommend creating a solid Partnership Agreement!

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Just remember: most negative reviews are written by problematic tenants.

Just remember: most negative reviews are written by problematic tenants.

What some people on BP don't seem to understand is to stop making the assumption that everyone is not working their best at thisif you have to provide negative comments or any sort of negativity when providing advice, then advice or recommendations shouldn't be your fortéAs i mentioned before.

Usually the discrepancy lays in poor assumptions:1.