@Wade Reeves I would suggest gathering all expenses for the property before making that analysis. 

The model was essentially purchase 90's construction units at about $100K, putting $5K-$7K into each unit, raising rents, stabilizing expenses, and then selling at $125K per unit in 5-7 years.

When you get down to a granular level you have to make room for and build a brand new kitchen which will be very expensive not to mention the rest of the rehab. 

If you can't  DIY it will be expensive.  

He does mainly decks and other exterior work, but does a little of everything.Also, does anyone know of any resources or guides to learn how to categorize expenses and do bookkeeping for this type of business?

Can you deduce the amount you pay as rent as a business expense?

@Parris EdwardsMarket CompsEconomic IncomeKnowing what the expenses should be for that particular marketContractor labor costand NEVER use pro-forma numbers given to you from the seller

it may come out against your DTI, when they look at your bank statements you will have to disclose the expense. 

So, an offer below fair market value coupled with the fact that he is living for free and selling the property means he suddenly incurs rental expenses, could be called disrespectful.

Purchase price: $300,000 Cash invested: $15,000 Bought this house purposely close to a college and lived in one bedroom and house hacked the additional 4 rooms, Dropping my house expenses down to approx 200/month.