1 - Don't buy a rental property based on a budget, unless that budget is based on the calculated cash flow and/or profit you can make, as long as the analysis done to arrive at those "calculations" were done with real numbers and not estimates.2 - Don't make any sacrifices on a property you want to turn into a rental if the sacrifice you make will be a sacrifice to the renter.3 - Don't take the attitude of "just getting into the market". 

Leave some margin in your estimates for surprises like foundation repairs (or get an inspection before you make an offer).Be careful that you don't end up paying too much when purchasing from family.

Is the billing from the past showing actual readings or estimates?

Even if I know what rents I'm going to get I still need to estimate the cap rate to determine the value, cap rate is based on purchase so how does that equation work?

We estimate the remodel at 25K. 

We estimate the remodel at 25K. 

Even if I know what rents I'm going to get I still need to estimate the cap rate to determine the value, cap rate is based on purchase so how does that equation work?

You may want to call a lender or two and understand how they would estimate the value as you may get a different value based on the approach.

STR estimate for this home (no pool, but thinking about It) is $4500/mo.

We estimate the remodel at 25K.