Because if they rent it's a straight expense deduction.

The owner should also be able to provide you leases and expenses.

Just make sure to properly calculate all costs and expenses to ensure that the property is in fact profitable. 

I'm curious of all the landlords out there, how much of the turnover that you charge to the previous tenant and how much you incur as the landlord's expense?  

Do you think it is going to be hard and/or more expensive to find contractors in Houston?

I have been going back and started to see lots of fishy expenses from my, property management company, for one of my out of town properties.  

You still need to meet expenses so if this isn't temporary you unfortunately will need to take action.

If you don't have to spend any money to get the cash-flow I believe it's better to just be patient and wait on the rehab.On your particular deal , hard to know without more specifics but if you assume 50% operating expenses, they are asking a 4.6% cap which seems really high for an older, partially rehabbed property.

Who are you defining expenses and who keeps track?  

We would then live in one unit, use two units to pay the debt service and operating expenses, and the fourth unit goes to the lender/investor to pay off their position.