FHA loans only make sense on loan amounts in excess of 2-3 Million dollars due to the high, upfront costs of the loan.Regarding reserves, I want to clarify what Hayden stated above.

The excess funds or profit from the sale shall be split evenly 50% to the Sawala's and 50% to me.All mortgage payments, taxes and insurance payments tendered and or paid by me or my company shall be reimbursed from the Sawala's 50% share of the profit to me or my company at the time of closing the sale of the property to the end buyer.

4-5K seems excessive. 

That helps block the moisture.

Having said that, if you use your handyman, you need to make sure he removes all the moisture (dehumidifiers) before he buttons things back up in addition to treating affected areas, or else you will still have the problem.

Darrell Essex,This is a topic that has been talked about excessively here and depends upon your personal situation.It typically is a bit best to get a couple deals handled to build up a bankroll unless you already have some funds.At some point if profits are enough you will want to consider an S-corp or a C-Corp to shelter profits from too much tax.By the way if you're ever in Lake County or in the Northbrook area let me know.Sincerely,Steven the Tax GuyYour guide to IRS laws, rules and regulations.

If each of those individual payments going out could be invested to yield in excess of the delta Jon describes then you should take the latter loan.Other things to consider are the risk associated with having to make payments each month, the impact on your ability to borrow more money, the inflation rate, etc.

@Sri YalamA bubble implies that there is an excess of inventory or an unsupported increase in prices.Right now, there is a shortage of housing based on the demand for living in the tri-state area...It would take a lot of building to meet that demand, which means we aren't anywhere near a bubble.It would take a shock to the system to curtail demand.

Send them a letter requesting payment for the excess.  

I currently self manage my buildings, but I have used 2 different PM's in the past.Both I had zero luck with, the more rentals I would buy the more money I would lose to excessive costs or past due rents etc.