I personally don't like all utilities included, especially not heat and electric.  

To determine the cap rate 1) Calculate the yearly gross income which in your case is $68,520.00 check the books make sure rent roll shows the rents are as stated.2) Subtract the operating Expenses not to include mortgage and interest =$28,936.803) Net Income = $68,520-28,936.80 = $39,583.204) Cap rate = Net Income divided by purchase price $39,583.20/400,000= 9.8958%Investors usually will use cap rates to compare properties in a neighborhood.

What I didn't mention is that she became a real estate agent last year to get an "insider" view of the factors going into real estate transactions, including the sometimes unforgiving taxes.  

That included getting a team in place, educating myself here on BP and other books, actively looking at the market to identify where I wanted to invest, determining my strategy, realizing there was a flaw in my plan, finding a private investor, and finding a deal that met my criteria. 

My spreadsheet for the property included an initial capital infusion at the outset to create a cushion to absorb unit turn overs, cap ex, etc until flow could catch up.  

Now, In my first offer I included an inspection contingency and also it is all cash offer, the bank countered for Highest and Best, due to multiple offers.

Buying in San Diego is buying a blue-chip stock.

The whole theme is pink to include the toilet and the tub.I'm considering leaving it and taking a hit on the selling price.  

As long as they are paying you in full, with late fees included, around 2-3 weeks late, and even if they did this every month, I would be fine with it.I own right at 25 properties, and about 6-7 of them are usually between 5 days to 25 days late each month. 

There are many reasons for this including tax and liability issues.