Am generally not a fan of inheriting tenants and if I do, I prefer that my lease be implemented, but clearl y that is not always realistic.Thank you though for this suggestion and I am going to try to see if working it from your suggested angle will work here in Colorado.In the end, I want to set up a lease that does not have holes, that an attorney, God forbid we ever have to evict (though these tenants do not seem like the type to cause any issues and I generally am a good landlord and stay away as long as you are following policy, so thus having a detailed lease that covers most all and then just backing off.My inspections are generally once a year, outside of the move-in, move out.I also stay very engaged in the running of my property, thus self-managing as in the end, I strive to provide a place I would enjoy living and I actually live on one of my properties.Long story short, don’t care for the very vague lease that the current property management company has running.Additionally I have little confidence in the way they were managing the property.The property has so much potential but has clear signs of neglect and I intend to change that as I never simply abandon my properties.On the question of current lease, I have combed through it repeatedly and do not see any mention of what happens at lease expiration only what happens when tenants are seeking to terminate their lease, “30-day written notice required”.No stipulation on what is required of landlord at end of lease and/or automatic renewal, both items that I cover in my lease and another reason, why am not a big fan of the existing lease.Leaves out a lot.I prefer having systems in place where there is little chance of misunderstanding, so thus the nerves on this one, but I will get through, thanks to you all for all your great advice!

If rents are 800x4=3200, then max sales price should be 320k.If he does not have a home yet, then go FHA, which is only 3.5% down but has PMI (mortgage insurance). 

In case if the units stay unrented, the borrower should have enough cash reserve with him to pay Principal, interest, insurance and taxes for 6 months.

All PM's carry E&O insurance to protect you.

I feel that it may not cash flow well since it seems like my payment is quite higher than I initially expected.Example: 2 bed 1 bath in 93728 Asking price $125,000Closing costs estimated: $7,200-$8000 (includes interest, insurance, and taxes for 1 year)20% down paymentTotal due upon close: $27,200-$28000Thanks for any advice or feedback!

Make sure and carry adequate insurance with high liability limits no matter what your situation.A final thought.....and I don't have first hand experience in getting sued but knowing others who have (in Florida), it is very unlikely that a judge will force you to liquidate a property, especially one encumbered by a mortgage, to settle a lawsuit. 

That was years before Obamacare and that was one way I used to deduct my medical insurance and co pays.

Does homeowners insurance cover leaks from one apartment into another?

Who is everyone using for insurance?

In many cases, closing costs include escrow deposits for taxes and insurance.