With those numbers the renters are going to rough it up and it will drive you nuts

Projection figures are all well and good, but the actual nuts and bolts of the plan can't be forgotten!

Would love to hear if anyone thinks these numbers / assumptions are wildly off or too conservative.Acquisition CostPurchase Price = $200,000Closing Costs (at 2%) = $4,000Due Diligence (at 1%) = $1,500Up-front Renovation Reserve = $5,000Total Acquisition Cost = $210,500Financing:20% down payment = $40,00080% loan (likely a major lender, traditional 30 year loan) = $160,00030 year term @ 3.2% (educated guess with very solid credit)Monthly Expenses:Mortgage Payment = $691.95Property Taxes = $120Insurance = $55Property Manager (soup-to-nuts) = $159Other Variable Monthly Expenses = $40Capital reserve monthly deduction = $37/month (5% of net income withheld for capex)Assumptions:3 months to renovate / update post acquisitionProperty rents for $1,400 / month (and assuming a 3% annual increase)20 day vacancy assumption = 5.48% vacancy rateTenant takes occupancy month 3Annual expense growth rate of 3%Expected / Target Returns:Monthly IRR (w/ financing) = 15.48%Monthly cash-on-cash return (average over 5 years) = 2.79%Monthly Net Operating Income (year 1) = $798Capitalization Rate = 4.79%Kyle

That is nuts...did you screen him for credit/income/references and all that?

Now what your are maybe looking for is a nuts and bolts answer, an ABC 123 answer of step by step what to do, how etc., and it will be wrong, absolutely without doubt.

It's in their name this year, but I want to go to the more lucrative option without breaking the bank if I get a nut. 

In a nut shell you need at lesst 1 person you can trust and a hood repair and maintenance process 

Basically, you have to find a property that needs work, but one that isn't low hanging fruit for a flipper / investor.

I have no answers and doubt these nuts we have running the circus in CA will bring relief, they only know how to increase government, raise fees, think of new fees, make excuses and tell us how wonderful they are. 

Plant an orchard...pecan trees, fruit trees, any other kinds of fruits that more or less take care of themselves.