For the purpose of just understanding the napkin math I provided above it would be the following assuming an IR of 7% and the RF of 1.458%:PP X (IR+RF)= Int and Principal PMT1.69M x (8.458%)= $142,940DSCR= 1.25 (To Ensure your Debt is Serviced by Your Income)$142.940 x 1.25 = Min NOI of $175,675Now I am not saying this is not a good deal, but if you were planning on ONLY borrowing at market rates from the bank, it would clearly not work so thats what the quick math would tell you.

I've got lots of rental data and info on income properties in the area.

I cannot answer if taxes would be more or less if he sells outright, what I can say is he will pay california taxes on the interest income of the loan.

I watched as cheap cash cars were bought with income tax every few years when they got too expensive to maintain.

My understanding is comparison sales approach or income approach.Comp Sales approach is getting comps from area and then carving carving 40% +/- off that price. 

Nor is needing income at all! 

Not to get rich or replace my income with real estate.

Even for flips/brokerage/wholesaling - there is minimal benefit in many cases to an S-Corp over just being a LLC subject to self employment tax, but getting the benefit of a 199A Qualified Business Income Deduction.Effectively all structures have very similar, if not identical, tax results. 

There are many sports programs out there for youth and adult athletics that could act as long term tenants which would be great in ensuring people actually care about the place and that it produces income.

One strategy to consider to boost the rental income is to rent out by the room.