Add everything up and throw in at least 10% for the unexpected and then.....double it.

The unexpected still can happen even if a property is fully paid for.

I never had a problem with unexpected visits when they were mailing or dropping to my home.However the main reason I have switched to a PO Box and put my properties into an LLC with the PO Box as the address was because of a property I was flipping.

In this scenario, amortization is going to bump your total current return to double digits ... and any rent inflation or market appreciation is gravy.The math works differently in these higher priced markets in ways that are unexpected if one's reference is a more typical market.

I learned that by accident while reading another post unrelated to the topic, and it was brought up.With so many rules in every state/county, it really does help to have a forum like this to consult. 

Not sure how to handle a. an alleged accident and b.

You do need some reserves to cover the unexpected operating expenses for the first few months.  

This is why it is very easy for buy and hold folks to have an "accident", sell a property and 1031 on a property with a very short hold - because their past history and current practice are two of the things that help them establish intent.That will also raise the bar for you if you ever want to do a 1031 exchange.  

So, the general numbers are like this:Purchase Price: $635,000.00 Purchase Closing Costs: $6,350.00 (I'm not even sure how this applies in private seller financing, so any insight to this would be extremely helpful)Estimated Repair Costs: $10,000.00 (This is just set aside for the unexpected up front issue)Total Cost of Project: $651,350.00 After Repair Value $635,000.00 Down Payment: $10,000.00 (He doesn't seem to have any big hobbies or desires for purchase, so I don't think he has much reason for any big up front payout)Loan Amount: $625,000.00 Amortized Over: 30 years (I'd expect the note/his will would write in to transition payment of this over to his daughter as just a nice steady cash flow that won't require any headache unlike a property sale during execution of a will)Loan Interest Rate: 4.000% (basically right at inflation)Monthly P&I: $2,983.85Unit 1 Rent: $1,600Unit 2 Rent: $1,600ADU Rent: $1,000Vacancy: 5% ($210/mo)CapEx: 5% ($210/mo)Repairs and Maintenance: 5% ($210/mo)Insurance: 2% ($80/mo)----------First year annual CF: -$367, ROI: -1.39%But by year 2 annual CF: $1,350, ROI: 5.12%and by 5 years in annual CF: $6,960, ROI: 26.42%....what am I doing wrong?

I define a good tenant as someone who: Pays all of the rent on scheduleTakes care of the propertyDoes not cause problems with neighborsDoes not engage in illegal activities while on the propertyStays for multiple yearsGood tenants are not an accident or the norm.