It doesn't pass the smell test.It could be completely legit, but I would definitely dig deep into his contracts, talk to other clients, and really vet him before moving forward.

I’ll be out of state, which I know is a big red flag for many.Well below 1% minimum of Rent/Property ValueHoping to self-manage (Yes, another big red flag)Loss of capital gains exclusionMONTHLY SUMMARYRental Income $3,500Less ($3,440) Mortgage (2,900) HOA (390) Rent Ins (150)Less ($1,155) Property TaxTot Exp ($4,595)Rev: ( $1,095) !!

Ultimately, don't be one of those people who jumps into the deep end without knowing how to swim. 

.- Neighborhoods to Avoid: Are there any areas that I should steer clear of due to high crime rates, low property values, or other red flags?

A high quality SFR in Austin will pay dividends in the long-run, and don't invest for anything but that. 5-6 years is too little, but if you are to expose yourself to that I would still take Austin.Those deep parts of SW FL are cyclical with retirement up & downs on economic recessions.

Don't you think that is a potential red flag?

If he can't provide a track record dating back several years, that could be a red flag. 

I called a real estate attorney today based on a Google search, and I got an earful about how Subject To was not possible, the bank would call the loan due, I need to have 'very deep pockets', etc etc etc.I know it's possible and there are people doing these types of deals.

They have one of the tougher credentialing processes out there, but they have excellent data that goes deep with relatives, neighbors, associates, etc.. 

My feedback is that you are getting WAAAYYYY too deep in to the weeds.