I need input on this buy and hold strategy

[Miles Stanley]

i met with a realtor/investor the other day who has basically the same goal i have related to owning buy and hold SFR's to supplement retirement.

his strategy basically involves using conventional (20% down) conventional mortgages to buy retail, on-market, turnkey/minimal rehab SFR's that cash flow. i admit i was kinda shocked to hear this strategy since a lot of what you hear on BP is to find discounted/distressed properties and/or motivated sellers to get a good deal.

He showed me some analysis and i ran my own numbers on a hypothetical house and they seem to work, although the returns aren't astronomical, but they do cash flow.  This person has done 4 properties in this manner and said he just saves up the down payment and as soon as he has the cash he goes shopping.

it seems the keys to this working are buying cheap enough properties, buying in an area with low enough taxes and having a good home warranty and insurance to cover repairs and service calls (though he does save a little each month for unexpected repairs).

Has anyone else used this strategy with success, preferably in and around the south Texas market(s)?

Thanks,