Compare with others lender and see the difference.

That said, my house smelled like roses compared to this one so I know I'm dealing with a different beast!

@Matthew WardAny payments coming into you for services should be considered revenue.Any payments going out should be considered expenses.It depends if your books are for internal purposes or if its for tax purposes.If its for tax purposes - Payments for properties should be classified as an asset.

New houses in the area of comparable size are selling for $300k. 

If I refer the seller to a realtor, it kind of defeats the purpose of having me around.

Question 2#Is it wrong to weigh in the personal pros and cons of a property compared with the business pros and cons?

@John Franczyk on the tax front, there is no expense you cant write off, or business tax benefit that cant be taken weather you are an LLC or a sole proprietor historically, its all pass through anyway, for example if you have a HELOC on your personal home, and use the money for business purposes, the interest and expenses are deductible as a  business expense. at the end of the day it makes no difference, unless you are avoiding  SE and filing as an S-Corp, but thats for active income, not passive.

Compare the cost of the dorm to the 3.5% down payment of an FHA loan, to see if the acquisition could actually save them money in the short term.

Unreal... its so advanced compared to the send 50$ to claim your $5000000000 from Nigeria....

Have you looked the current rents and compared them with the area rents with for similar properties?