Capex and tenant issues tend to exceed cash flow and when you decide to exit after a couple of painful years, you are in for another surprise:It is shockingly hard to sell cheap homes! 

@Bill B.Here are a couple more things to think about.

Historically, properties have appreciated more in A locations, but the cash-flow is nonexistent in the first couple of years whereas C locations cash-flow day 1. 

You could ask that they put a year or so of savings into a separate account on which you have view access or receive a monthly statement so you can see they have the ability to pay future rent.They aren't going to last without other income or savings with income at 1.25x rent.

If you don't create an LLC, you should open a separate personal checking account to track rental income and expenses.

I am planning to build a business to replace my income in couple of years so as to have monthly cash flow equal to my W2 income.

This way, you'll have access to liquidity without the headache of managing separate loans and fees.Predicted Refi Rates: While no one can predict rates with absolute certainty, the general consensus is that rates may stay lower or remain stable in the short term, barring any economic shifts.

A suggestion I would give you is to find a couple "for rent" signs in your local market, get the address and start "running your numbers" on the rental property calculator that BP has for us on here.

Since Camby / the Tri-County Conservancy District won't allow the utility service the tenant receives to be in the tenants name, and since it is a flat fee, I'd ask if the tenant if they'd like to add it to the rent or if they'd like me to send them a copy and they pay me separately.

You can create a separate virtual account for each unit that will link to your main operating account.