Please correct me if I am missing some line items here, but here are the working numbers for the property:+ Gross Rental Income: $150,000- Cleaning Fees: ($21,600)- Management Fees:  ($19,260)- Property Taxes: ($3,700)- Insurance: ($2,400)- Trash & Local Tax: ($650)- Utilities: ($7,200)- Pest Control ($560)- Supplies/Maintenance: ($1200)- Acct/Legal: ($1500)TOTAL EXPENSES = ($58,070)Net Operating Income = $91,930---Based on my limited understanding of the local CAP rates for similar properties in Philadelphia, PA 19106 it looks like 5-6% is a realistic number. 

I see in their supplied Proforma that Net Operating Income is $75,720 and their listed Cap Rate is 5.11%.When I do the formula for finding value (value = NOI/Cap Rate), I end up with $1,481,800.What this appears to tell me is that they are charging a $218,200 premium over the value of the property when figured against a Cap Rate of 5.11%, correct?

I have not yet consulted with my own attorney,  I was hoping first someone here might have experience with quit claims to family and any such structured notes for payments and the best way to go about that. 

I'm really looking for something with multiple units, i.e. dueplex, quadplex, etc but it looks like the supply is mostly older single family homes. 

He doesn’t want to own long term, just wants a good return on the money, and I want to build a portfolio of single family houses.What would be the best way to structure this?

It's tedious to do, but that will tell you the supply of storage. 

Most older houses actually are more structurally sound due to higher grade of lumber that was typically used back then.

In other words, the incentive structure breeds a sort of tenacity and grit.

Was it structured the same as a local lender?

However, the resulting income is taxed as business income, which means ordinary rates PLUS 15% SE tax.The starting point would be to decide which of the two treatments is applicable in your situation and then structure it accordingly.