There will be a significant upfront cost/investment to do this but I am thinking it can be a long term profitable little side business ESP. b/c of the fact I will own the building and will not have to pay rent to anyone buy myself as well as it won't require much overhead to run the business.The other positive factor is I would buy the equipment new so there would be low maintenance/repair issues.The way I see it my biggest expenses would be utilities IE. water and gas electricity, as well as insurance and then whoever I hire to run the business.

While you didn't direct that to me....Yes you could, I wouldn't make it so obvious setting the rate to IRS minimum, and it fluctuates quarterly I believe..... 1% above as a margin as an adjustable annual rate is more believable IMO.There is no problem with a note and an annual payment, even interest only annually, the easiest way.

Kyle: I've been using annual credit report, and already did 2 of my scores and have 1 remaining...

Real expenses include depreciation, repairs, maintenance, vacancy loss, leasing fees, management fees, accounting fees, legal fees, all fees necessary to carry out an eviction (if necessary), postage, office supplies, HOA fees, landscaping, make ready upon tenant move out, etc.

Inspect the property for potential deferred maintenance or needed capital improvements (roof, heating system, etc.).

I guess the only thing I can come up with is cheaper maintenance for less repairs?

(neighbors have audis)Mathematically I assume: 20% down, 3.75% interest, 10K rehab, $7K total closing costs, 8% annual maintenance ($0.75/ft annually), 91% occupancy, my property management costs (~8% gross rent inclusive of leasing costs), insurance, $750 annual "other" (tax prep, insurance).

Those with limited resources are usually lacking in the ability to pay for repairs, so you have deferred maintenance, not just with the home but perhaps with everything, like cars, so you may also get junkers in the driveway.

2) How much should I put in the cash flow analysis for repairs/maintenance?

Overall the building is in great shape, with the only major maintenance issue that I can see is that the roof looks at least half way through its life.It's listed for $49,500 but has been on the market over a year likely due to comps.