I know that <5,000 sqft you do not)Legal: $3,500Other: $16,000 (Budget for unforeseen issues)Tap & Capacity Fees: $27,515 Building Permit Cost: $2,391.17 (estimated $706K total costs)Site Plan Review: $224.64 ($100 + $.015 p/ sqft)Wastewater Capacity Fee: $750 per unit x 8 = $6,000Water Capacity Fee: $750 per unit x 8 = $6,000Meters: $300 per x 8 = $2,400Water Tap Fees & Install: $300 per unit + 900 installation = $2,400 +900 = $3,300Wastewater Tap Fees & Install: $300 per unit + 800 installation = $3,200Facilities Tax: $4,000 - ($500 * 8 units, I am assuming this will change as I haven't asked solid numbers )Total Development Costs: $783,785 (8 units costing $94, 848 each, which I think is high)Proforma CF $ - Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Income   Rental Income (Increase 2.5%/yr) 2.50% $ 79,200.00 $ 81,180.00 $ 83,209.50 $ 85,289.74 $ 87,421.98 $ 89,607.53 $ 91,847.72 $ 94,143.91 Vacancy (10% in Yr1) 5% $ 7,920.00 $ 4,059.00 $ 4,160.48 $ 4,264.49 $ 4,371.10 $ 4,480.38 $ 4,592.39 $ 4,707.20 Gross Income $ - $ 71,280.00 $ 77,121.00 $ 79,049.03 $ 81,025.25 $ 83,050.88 $ 85,127.15 $ 87,255.33 $ 89,436.72                   Expenses                   Real Estate Taxes $ - $ 9,000.00 $ 9,090.00 $ 9,180.90 $ 9,272.71 $ 9,365.44 $ 9,459.09 $ 9,553.68 $ 9,649.22 Insurance 2.50% $ 3,000.00 $ 3,075 $ 3,152 $ 3,231 $ 3,311 $ 3,394 $ 3,479 $ 3,566 Trash Collection ($250/unit) 1% $ 2,000.00 $ 2,020 $ 2,071 $ 2,122 $ 2,175 $ 2,230 $ 2,285 $ 2,343 Common Utilities 2.11% $ 2,400.00 $ 2,451 $ 2,512 $ 2,575 $ 2,639 $ 2,705 $ 2,773 $ 2,842 Management Fee (10%) 10% $ 7,920.00 $ 8,712 $ 8,930 $ 9,153 $ 9,382 $ 9,616 $ 9,857 $ 10,103 Repairs/Maintenance 3.00% $ 2,138.40 $ 2,313.63 $ 2,371.47 $ 2,430.76 $ 2,491.53 $ 2,553.81 $ 2,617.66 $ 2,683.10 Turnover/Redecorating 1% $ 2,000.00 $ 2,020 $ 2,071 $ 2,122 $ 2,175 $ 2,230 $ 2,285 $ 2,343 Snow Removal/Parking lot cleaning 2% $ 1,500.00 $ 1,530 $ 1,568 $ 1,607 $ 1,648 $ 1,689 $ 1,731 $ 1,774 Landscaping 2% $ 2,000.00 $ 2,040 $ 2,091 $ 2,143 $ 2,197 $ 2,252 $ 2,308 $ 2,366 Admin Fees 1% $ 1,200.00 $ 1,212 $ 1,242 $ 1,273 $ 1,305 $ 1,338 $ 1,371 $ 1,406 Total Expenses $ - $ 33,158 $ 34,463 $ 35,188 $ 35,930 $ 36,690 $ 37,466 $ 38,261 $ 39,074 Net Operating Income $ - $ 38,122 $ 42,658 $ 43,861 $ 45,095 $ 46,361 $ 47,661 $ 48,994 $ 50,362                 Property Value @ 8 CAP $ - $ 476,520 $ 533,223 $ 548,258 $ 563,686 $ 579,517 $ 595,761 $ 612,428 $ 629,530 Obviously, Once I account for my debt service (DS), say $758,000 @ 5.25% for 240 months ($5,108 p/ month), I am under water.Year 1 NI [$38,122] - DS [$61,296] = -$23,174 = Meaning I cannot do this project.......

I haven't done a ton of deals but have done some without issue. if you have the ability and time you can act as your own GC.

has anyone ran into issues trying to do this?

@Matt Souza I have gotten the chance to speak with the tenants and they are not happy with the current owner and property management because their issues to them have been ignored and  the two who were saying they were ready to leave are the ones that pay late but all three are violating the terms of their current lease and since my family will be moving into one of the unit apartment with our children it isn't imperative to us that we know who isn't really living amongst us.

Jia,Ask your agent for a copy of the Declarations  of the policy (many companies issue them electronically) or if that is not available, get a Binder. 

Maybe it isn't much of a distinction I guess... because either way I'm paying retail for an out of state rental that someone else puts a tenant in.Which is turnkey?

When rent is not paid on time the tenant should be immediately issued the pay or quit notice before seeking any explanations from the tenant.

I love hardwood but do laminate because the issues of adding 3/4" to the floor with doorways etc is too much of a PITA.

We use the following rule of thumb - if it does not do permanent damage to the property, if it does not cause neighbors to complain and if it's not a legal issue - it's probably okay.

I try to work with a handyman every time there is an issue on my rental but thankfully, there are no big issues with it so far...I also have plans of buying a SFH in this area and making my current town home a rental in a couple of years.