Those extra costs add up and some investors determine that it's not worth it in the long run.  

Profit will be split 50/50 I am trying to determine what I am missing or over looking.

The tax assessor doesn't look inside a house when determining value. 

One is to approach from the flank and determine what is upsetting his/her boss most and discuss ways to solve this.

The number one thing for you to do is to determine your exact strategy, and stick to it until you have enough knowledge/income to expand. 

During the feasibility period you will want to:1) Perform inspections of the property2) Get estoppel certificates from all the tenants3) Get all leases4) Get copies of all financial information, including copies of all expenses paid for at least the last year.5) Get rent roll6) Determine if a certificate of occupancy is required, and find out if the seller has one.Those are a few of the items you will want to see during the feasibility period.As far as the HVAC, if the unit was installed in the 80's, it's well past its useful life.

In order to determine if $5k capex is a good number, you should have an understanding of the remaining life in the roofs, and how much replacement will cost, whether windows are needed during the time you'll own the buildings, HVAC life expectancy and replacement costs, etc.  

Now, unless I'm missing something pretty significant I think the ROI over the 5yrs just from rent is good so I was advised to focus on that since I have no idea to determine future value.

Since I'm buying SFHs it's easy to determine my cash flow (after debt services, maintenance, repairs, capex, vacancy and property management).

I would look at this deal from a worst-case scenario point of view and determine if it still fits into your style of investing.Kenneth R.