I have paper applications at the open house so anyone interested can fill it out right there or I offer to email them the electronic version.

So for him, paper losses are good.

The cheap homes may look great on paper, but the costs are always higher and tenants more problematic.Selling one property to buy two can make sense when you have equity built up and room to borrow more money. 

Seeing it on paper like this makes me realize it doesn't hit the 1% rule either, but maybe because the taxes are pretty low?

Or at least just getting all of your thoughts and numbers on paper (or in a spreadsheet) and mapped out over the time period you're talking about, I think would be a very helpful exercise for you.

It sounds like a trainwreck on paper...and things usually go better on paper than in real life I would suggest saving, increasing your income streams, and learning in the meantime while you save. 

I just freeze even seeing that gray paper

I think its a no brainer on paper. only you know the local market, will it lease?

Your cash flow will look great on paper, but sooner or later the house will need a new everything, which is usually 50k-70k. 

It would be new furniture and updated appliances, but still need to think of capital expenses.Basic Supplies (tp/shampoo/paper towels) - $200 per monthCleaning - $250?