An attorney cost will be peanuts to that payday...Probably a tax CPA/EA too as it appears you're forming a general partnership for tax purposes -- which will require an annual Form 1065 filing with K-1s issued to partners.

@Kory Knapp I wouldn’t try to get to market rate all in one annual rental increase.

To answer your question on cash flow all of my successful str’s bring in right around 3 to 2x the LTR annual earnings.

I am an OOS investor looking at the San Antonio area.Newly built Quad in a B/B- area near military base560,000Rents 4800 loan with 25% down (4.375% 30 year)Hoa - noneClosing costs 1.5%Est appreciation 3.6%Vacancy 5%Property tax 14000Prop mgmt 8%Insurance 2k annualRepairs / cap ex - 5%I estimate around 6k annual cash flow. 

.- Section 8 forces you to make repairs on the most minor small things on their annual inspections. 

Our rates are annually, meaning , you pay monthly only on the loan amount & the notes are 12 months, with No prepayment penalties and no Minimum interest, were your locked into the loan .Banks have no programs for investors of this high leverage on purchase and full rehab , interest only.So the 9% annually equates to .75% per month, which is cheap, cost effective. .

When purchasing distressed-debt that has potential  loan modification future we typically set the floor at 12% annualized cash on cash return.

Don't forget that you have to honor current leases, which are typically annual leases at section 8.

@Henry Wolfe buy now.... property appreciation will far outgained the 1% your cash is getting from a savings account.

- Due to the long distance and the HOA covenants, I'd have about ~19k in annual operating costs when I include both mgmt service fees and burden my ROI with the opportunity cost of not investing the stocks.