In my opinion, this area is a melting pot, there is low income, high income, and short term rentals all mixed together. 10-15 years ago, I wouldn't have gone to this area alone to work, but it has gotten a lot better and I have never felt unsafe while working in this area alone. 

I said around 200-250 and she replied that seemed low (which was quite discouraging)

@Minji KimRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which is VERY important for stable rental income and low property maintenance/damage.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

To begin, I am considering renting my primary home because the loan is at a low interest rate, and the cash flow, based on comparable rentals in the area, is promising. 

Cannot be a low property value (less than $150k) 

To answer your question, 10% seems to be on the low end of what I typically see.  

Henderson City offered a low 3.5% interest loan for redevelopment.

@Ryan G.Those numbers sound reasonable. 40k rehab may be a little low for most projects.

Many investors want to invest in real estate, but find it too expensive where they live, so they turn to our market in Memphis, TN (Workforce City), attracted by the low barrier to entry and cash flow potential.

Do you have credit cards with places like Lowes and Home Depot that you can use to buy materials now and not need to pay off for maybe 90 days?