I wish I had a multi unit to apply the concept to.

What we have put in-place for ourselves would likely not be appropriate in you situation.In Canada I was going to start investing as sole proprietorship so i could get the lower tax rate ( the need for liability protection via corporate structure is lower in Canada).When you are first starting out there can be benefits to holding {residential rental} property in your own name - especially if you are expecting to produce negative cash-flow in the first year or two as you can use the loss against your earned income from other sources.

Are there any negatives?

In the concept of the bundle of sticks of property rights, a lender only receives a few sticks out of that bundle.Oh, and those who think they can wear two hats, being a lender and then calling the shots, without ownership, if your deal goes south you can bet the borrower is going to claim that the reason for the deal blowing up was due to lender involvement in management and if you did get involved, guess who looses, won't be the borrower.

I love the idea and a lot of the concepts are really cool.

Given your numbers, you will be getting a very low or negative return on investment.If you did not include maintenance wear and tear costs and will be hiring a private management company, then you’d be losing money on your investment.$20,000 (income) - $13,000 (carrying costs) - $5,000 (management fees) - $2,400 (maintenance costs for wear and tear) = -$400 net incomeIf you did include maintenance wear and tear in that $13,000 and did not hire a private manager, then your return on investment would be 2.7%.$20,000 (income) - $13,000 (carrying costs) = $7,000 net income$7,000/$260,000 = 2.7% return on investmentIf you did include maintenance wear and tear in that $13,000 but decided to hire a private manager for an extra $5,000, then your return on investment would be$20,000 (income) - $13,000 (carrying costs) - $5,000 (management fees) = $2,000 net income$2,000/$260,000 = .77% return on investmentYou’ll have to decide what kind of return on investment is acceptable to you.

Cash flow on this house is negative, no question. ($800)/month without any expenses other than taxes factored in.

The problem with EVERYONE from OUT-OF-STATE on here who bashes or puts their negative two cents in about Detroit and Metro Detroit is that they don't know what they are talking about.

Half of your rate is $1,175 per month, your mortgage payment is $1,150 per month, leaving you $25, however you have a $180 per month water bill, so your are $165 to the negative.

This 20% ARV concept blows my mind right now in the market within which I operate...