Part of your inspection process should include a review of the lease agreement and other documents, payment history, and a complete inspection of the unit.

Fast forward into may and the other guy apparently tried to drop his asking to $1.2m after inspections.

In a training program I did I was taught to estimate costs at 50% of gross income when analyzing the financials, but after looking through dozens of marketing packages I have only found 3 where reported expenses even approach 40% and most are around 30% or closer to 20% of the operating income.

The home will not pass an inspection due to mildew/mold in the basement.

I will be calling around Monday.Thx again, AlanIN SC I sure do.. that's why when I go into contract in that state I run title day one.. so this does not happen at the end after I spend money on due diligence.. most closers there wait until the last minute to run title so its a little backwards compared to CA or OR WA NV etc. 

I know there are Seattle-specific rules about rentals, I need to get an inspection and get the house registered, etc.In the past I’ve used a leasing real estate agent to find me a tenant, do all the background screening, do the leasing paperwork, etc.  

What do you think it should've been closer to?

I would think the two main things to worry about would be building inspector and the inspections when you get ready to sell. 

If you're both bringing in the same things, closer to 50-50 split is fine. 

You need to assess the extent of it first with inspection from them.If you dont have to that will save alot