For one, these type of properties are rare in this area, and second, if its on the MLS the owners want a mint for it. 

Unit 1 currently rents for $850, after improvements (adding central air to whole property, W/D in basement) we will rent for $950Unit 2: Total gut job and we will rent for $1,150Income/ExpensesTotal Monthly Income: $2,100Expenses: $830.57, Saving: $315, Total = $1145.37P&I: $531.45 + $40.26 (additional $7,500) = $571.71Insurance: $100 per monthProperty Taxes (yearly): $23875% vacancy, 5% repairs, 5% CapEx (we are replacing roof, gutter, new A/C, and 2nd unit will be brand new everything) = $315 per monthMonthly Cashflow: Before Saving: $1269.63, After Saving: $954.63For our calculations, we use the before saving value because we both have full-time jobs and will be dumping a large portion of our paychecks plus cashflows from this property and other properties into an account so we will have ample fund if something were to come up)ROI:Purchase Price = $82,000$33k (down payment) + $2.5k (extra cash needed) = $35,500Total Monthly Income = $2100Monthly Expense = $830.37Monthly Cashflow = $1269.63ROI = 12 * $1269.63 / $35,500 = 42.92%ROI (w/ savings) = 12 * $954.63 / $35,500 = 32.27%Cap Rate = 26.36%Cap Rate (w/ saving) = 21.75%Additional Factors:As stated above, this is one of the last parts of Oakley that is being improved upon and the average home value is $199,500The house next door (that is the exact same as this property) sold last summer for $165,000With the combination of the two above, one of our exit strategies is converting the property into a single family down the roadThank you for reading!

It seems like the combination of these facts has caused issues.

I rarely would say consult a lawyer but you may do well to do so in this case.

But interior stairs that require trim work and a combination of oak and pine we outsource.

Bought a 4 unit and a house (two different parcels combined at one point) in Historic Kenwood in 2012 for $139,000.

First the no trouble discount ,  this is  a tenant who rarely if ever complains, when they do it is warranted and when you need to get in their apartment there is no issue to do so.

If you can find that rare unicorn of an agent in your area that also OWNS rentals, be their friend for sure @Sean S.!

Lease Options are rarely advertised for, and if they are, they are from investors, not sellers.Here is a thread on "How to do terms Deals"I talk about negotiating with sellers, and marketing for deals.Best of luck in land of Cavaliers!

I purchased an REO (that was remodled - rare), Short sale, and regular transaction all with FHA loans.