If your cost plus repairs, holding costs, and closing costs all end up equalling the value of the house, then you might as well have just paid retail value for regular fixed up property.

Lower price points do not necessarily equal cheaper projects especially when entering a market you do not have a solid grasp of.  

Cap rate is yearly net operating income dived by purchase price.Net operating income equals gross income minus expenses before debt service.

In addition to the property qualifying, the sponsorship group needs to qualify through experience (at least 1 year of prior multifamily ownership experience or Fannie Mae/Freddie Mac experience) and balance sheet (net worth equal to or greater than loan amount and post close liquidity of at least 10% of the loan amount).  

I would caution that if the tenants are splitting equally, and one begins to feel that the other is not being efficient, you might start to have squabbles.

You may have to do an equal amount of work to find the contractor as the deal.

I have re-drafted my lease to include a "buy out" clause which states that the lease can be terminated early by either party upon 60 days notice in writing and payment of x dollars which equals 2 months rent.  

@Allen Fletcher what they are saying is the estate will only allow them to sell it for a price that is equal to the appraise value which is still way high. 

He goes between both equally.

I can only assume the final sale price would be some discount from the ARV equal to the rough rehab costs that backs into a reasonable rental or sale return.