It was eat, sleep, and breathe Real Estate at that point.

Making a borrower feel grateful is simply part of the scam, you could give a starving person raw fish to eat and you could make them happy.

I'd get verification of the income they do have; they still need money to live and eat, and may have to pay for part of the rent and utilities.  

Investing in fly over states may give you initial cash flow, but capital expenses will eat into that, and the near zero appreciation and rent growth in many areas will leave you spinning your wheels.

The basic numbers seem ok, I personally like a larger ROI on paper as in reality things always come up to eat your profits.Be prepared for a battle to evict those 2 tenants, expect additional costs there.Are those market rents you plan to raise to?  

Some may be ok with properties like this as the comparison would be that the fees cover roof, common grounds, exterior insurance but regardless, I look at it as eating away any kind of return.As others stated, you would do well to get the documents and P&L if you can to see just where the money is being spent and what they cover.Good Luck!

Then they have a claim and its denied because the house was empty.This is your error and you're going to have to eat the loss.  

Best thing to do is evict immediately upon non-payment, keep their security deposit to cover most of the losses, swallow your pride and eat the rest.

^You can't have your cake and eat it too! 

Also it will eat up any organic material like leather gloves etc so be careful when you use it.