So now i would have an income producing property owned outright worth 30k.

I wouldn’t waste my time on anything that doesn’t produce atleast 2% .

The idea is that over a long hold period, your expenses on an investment property if you track them very well will tend to gravitate to about 50% of the income it produces. 

Im looking for a single family home in houston texas that could produce passive income.

There is no deals in Hawaii that produce cashflow.

Then it produced a materials list of their windows, doors etc etc that they already had & pricing.

For example, a vacation condo rental that is treated as a trade or business for passive activity purposes solely because the average rental period is seven days or less is still a real estate rental exempt from the self-employment tax.Per Reg 1.1402(a) - 4(c)(2)- If only services provided in connection with 7 days or less or 30 days or less are beyond customarily provided in connection with the rental of the room or other space the activity produces SE income, if not, NO SE taxes. 

You are essentially turning your "liability" of a house into an asset by having it produce income.If you are near a college town, even better.

You reside in a market that historically has produced one of the best ROI for buy n hold in the nation and you are considering buy n hold elsewhere. 

Rehabbing and flipping seems that it would better suit my current position, but ultimately I would love to own/rent to produce steady streams of income.