That can quickly eat up some of the benefit of the cash out with regard to spread on the next deal.

.#3 Hidden costs:   Even if you sell your property at a higher sale price than when you bought it, agent fees, repair fees, capex fees eat away at your profits.  

And she might be wanting to cut down on eating out to make sure you get paid but will her boyfriend?

Thankfully some other deal will hopefully make up for that but I can't tell you how many deals have collapsed at the 11th hour through no fault of my own over the years and for me to get a fat $0 in earnings.

IF the occupant is financially strong, you use an LMLO,  the price is market and DTI works out and you do a good job of creating a fat folder.  

Do these number Monthly Gross Rents $ 4200Monthly Expenses  Vacancy       $ 336 (8%);  (including here since 50% rule includes vacancy as part of expense)  Prop Mgmt   $420 (10% of gross rents)  Insurance     $208 ($2500 yearly; quoted by insurance agent)  Prop Taxes   $680 (2.9%/year of assessed value; actuals; eats up 15% of gross rents)  HOA fees      $330   Maint Reserves:   $420 (10% of gross rents)  Maint/Repairs       $84 (5% of gross rents)Total Expenses : $2478 (59% of gross rents)  NOI:   $1722  Mortgage: $1215 (25% down @ 5% interest)Approx Cash Flow: $507/month (about $125/unit)Cash-on-Cash: 7.2% (Assumes 25% down + 3% closing costs as initial cash requirement)Thanks,Jacob  

I just learned that isn't the case - in fact, taxes on flips eat into a large part of the profit. 

With in 5-7 years I would like to be able to financially stable, that is to say that at this point I can cover all living expenses as well as be able to be able to purchase a car, or new appliances, or cover medical bills, all without having to worry about if I'll enough money to eat that week. 

Most of the middle class falls into the trap of two working parents, long time and energy sucking commutes, always stressed for time, buying stuff to keep up, eating out frequently, etc. if you are truly middle class the only thing preventing you from wealth is you (exceptions for major illness or other uncontrollable life events).

Those ASU college kids you're going to be looking to rent for will do damage to your place, and they typically turn over every year, so that will eat into your cash flow.