My questions that I need some help with are as follows: 1) At what point should I introduce a RE attorney into the equation?

So to actually lose money and see the compound leverage truly work against you your NOI plus appreciation would have to be below $4800 per year, and this scenario would equate to only 4.8% IRR for a cash purchase.

I equate that with buying a stock because you know someone that works for the company.

If hope/luck is a significant factor in the equation, Im not really investing, Im speculating.

I like some mortgage paydown as part of the equation but you need to consider what does the money cost you? 

Take yourself out of that equation and pay a manager 30k to 40k a year and your profit is almost zero now.If you don't want to buy yourself a job then larger businesses are purchased where assistant manager and manager are in place and it still profits high numbers.

It pertains to estimating operating costs and has no relation to value as your use of it implies.There is no way to analyze your monthly payment vs rent equation to know if you have a good deal. 

As Steve suggested, reality has to enter the equation.

If you put pen to paper and do simple arithmetic, how long would it actually take you to equate the same cash using the rent & hold method.  

The other part of the equation that I didn't mention is that my lease says that I am not obligated to return the deposit if she doesn't give notice.