The synopsis on how to do this are best described in THIS POST and THIS OTHER POST.Good luck on your journey.

Calculating it the way I'm describing above would use the $500 number, giving a vacancy of $4,500 ($500*10*90%). 

I roughly describe to people as such:D : Basic housing that is not very nice cosmetically, is likely in stigmatized neighborhood, and that would not pass municipal health and safety inspections for occupancyC : Basic workforce housing.

And keep in mind cash flow to these folks is basically described as 20% cash down or 25 to 30% forced equity then loan for the balance and now it cash flows.. your talking about tying up what should be a prime asset for no money out of pocket 5k a year for the option basically to purchase it but you get the tax bene's of owning it so net effect will be less than 5k a year. 

It's the method of acquiring the property that is important.I hope this makes sense how I am describing it but hit back if you have any questions on it.

There are plenty of cool videos online to describe the process if you're interested!

I still think the costs they charged based on the damage you described is excessive. 

The prices you're describing seeing in your area are pretty similar to what we're experiencing down here as well.

@Daniel Simpson what you are describing would be pretty impossible.  

That's really the only mechanism that exists in lending that fits to anything close to what you are describing.