Hey @Sam Tomar,All of these replies have been great, one thing I have been considering and made sure not to overlook is having the following included when calculating my NOE.Management Cost: In the context of an out of state ownership I would assume between 10-12% (of your yearly gross income) as a fee from a company that would manage the property (Procure tenants, manage any maintenance projects).

In my contract, I provide "30% upon order of the materials, procurement of necessary building/general repair permits, and commencement of the work;" 

The tenant would have to Immediately Procure Business Liability (and ideally renter's) Insurance and add our LLC which owns the property as the additional named insured2.)

If he told you about it first, before you talked to your friend, he can show he was the procurring cause of the purchase and can sue you if you buy it.

(I am no lawyer) Does your lease require that you procure any of those services?

Until you procure an interest from someone in the chain of title, you have no claim to the property and no claim to open up a probate action.

Last thing I want to do is a favor for someone and end up in hot water as the procuring cause if for some reason the deal tanked.. and as we know deals can tank.AS for multi.. not really anything I personally do but I have looked at a few lately in our market and they are selling at 3 to 4 cap... and when talking with brokers they say they have multiple offers and most are being bought by 1031 folks..

I'd like to add to them:  put in a clause in your lease that reads 3 or more domestic disturbance police visits may be cause for termination of lease, and: the tenant authorizes the landlord to procure a copy of any police incident report.The first clause is self-explanatory, the second--many police departments will NOT issue a police report to anyone not directly involved with an incident. 

I can see your analysis showing the most stable investments and to some maybe that equates to best but as far as returns go I guess I'm not sure how to make that work unless I'm severely undercutting the rental price or if you were able to procure the property at a huge discount. 

If you are asking $3M for the business and only have $50k of inventory on hand, then it probably doesn't make sense to separate it in the negotiation.Also, since you are selling to your partner, it may make a difference to him if he is going out of pocket to buy you out or if the business entity is buying and retiring your shares.It would seem to me that the cost of procuring inventory probably doesn't come into play.