It is a first floor apartment with low taxes abs maintenance which made it a good place to begin my real estate journey What made you interested in investing in this type of deal?

Next what maintenance are they responsible for. 

You listed maintenance and CapEx 3X, which is going to skew your numbers a bit.

We use a quarterly maintenance company to manage the physical aspect of our properties.

My wife and I have concerns about the liability and putting the pool maintenance in the hands of the tenants.

Our concern is his connection to previous seller, him having his daughter in another unit and his really low rent AND him having his maintenance equipment on the property.Thoughts or any additional questions you have before giving me your thoughts!

However, using the following numbers:Purchase price: 283K / Monthly rental: 2600 / Vacancy rate: 5% / CapEX and Maintenance: 5% each / Property Taxes: 3000 / Insurance: 1000 / Property management: 8% / Finances: 3% closing costs, 20% downpayment, 5.23% interest rate, 30-year amortized / Appreciation: 4% ....I come up with 7.12% cap rate and a COC return of  8.03% .

But there were some maintenance costs and one of the tenants was really difficult for a few months and left $2,000 in unpaid rent and damages.

I do all the maintenance at my original property since I'm in the same city so I've never dealt with a management company.

The reason they do not allow 100% of the rental income is because they assume 25% will get eaten up with maintenance, repairs, management, etc (they are effectively accounting for your properties operating expenses) With that said, they place a cap on the qualifying rental income at your PITIA (principal, interest, taxes, insurance, association fees).