FHA is strongly enforcing this rule.

As a personal rule of thumb, I will only work with local lenders that I've seen around for more than 1 year and have had a face to face conversation with.

If you buy at $60,000, rehab $7,500 (worst case) then your total investment comes out to be $66,500.Rent it out for $850.Then, using the 1% rule, which I find very effective in showing me if I will make a profit comes out to  $850/$66,500 = 1.3%.   

I do this for them because I have to create a future that we only dream of.

@Alexis Miranda, you have to market for them and create them.

I don't need nor would I pay that kind of money.Recently one of my engineers creating a site plan for me on a development project had his website redone.

Also check with your board if they allow you to buy the other unit as investment and what are the subletting rules.

But not every entity is created the same and not every coop is set up or dissolved the same.  

Mix in a blended rate of equity created by tenant, tax breaks and appreciation, then your return is much higher.

He will want to stay involved with the property long after his financial investment is paid back, to get the most bang for his buck which I'm fine with, but I want to create clear expectations for his future return.