The 1031 exchange is what allows them to do this without having to pay tax on the gain or depreciation recapture. 

NOI Underwriting Methodology: NRI and EGI, real estate taxes, operating expense underwriting rules of thumb, replacement reserves, appraiser’s impact on lender underwriting, expense comps, etc.10. 

The big advantage is having the capital gains spread out over many years to avoid a huge tax bill.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

If you control how they perform tasks, set their hours, or provide tools, they should likely be a W-2 employee, requiring you to withhold taxes and comply with payroll regulations.

I'm assuming you are arriving at your cash flow number by applying Gross income - cap ex, maintenance, utilities, vacancy, tax, insurance, mgt, landscape/snow & Debt service?

It is disheartening to witness a mentorship program that boasts substantial financial success, with students allegedly earning substantial monthly incomes, yet fails to ensure that their own employees receive even the minimum wage they are entitled to.

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

Taxes 10k HOA is 9k The current owner never did short-term rentals.

(gross rents $4900; 8% PM; mortgage+insur+taxes = $3600/mo).