I would love to go into details on how to estimate costs of putting work into it (materials, getting to know contractors, etc) to make an informed decision when purchasing a property up front.

I do have my own spreadsheet that I use for detailed flips & rehabs. 

Put something in writing detailing all the improvements he has done that states the improvements stay in the property when he leaves and he will not receive future compensation for said improvements.4.

.- Capex: no matter how many deal analysis I perform with the BP rental calculator for 5-30 units, I usually end up far from the asking price.

You may want to run an analysis on leveraging the rental as to what your net ROI would be after paying UDFI tax on the leveraged portion.

If you have questions about how to find a good PM and what to ask them, I wrote a blog post with some of the details you'll want to look at, you can find it on my profile. 

@James Orr I would love to chat with you more on Wednesday, I'll be coming to the meet up tomorrow night about the deal analysis 301: Multi-family :) 

Best of luck, and feel free to PM me if you have more specific follow-up questions or details to share.

. :) Without going into too much detail on the tax code, we know that 1)  less than 7 days or less and 2) 30 days or less are two of the 6 exceptions to rental activity provided for passive activity purpose.

Having a knack for numbers and data analysis will serve you well!