This is like a forced savings where these funds will accumulate until you need to make a Capital Expenditure (roofing, replace hvac, road work, etc).Getting private money lenders at 4% for 6 years is very unrealistic.

Adele,Have you accounted for the utilities paid by owner like water/sewer/trash and capital expenditures %, management%, and vacancy rate?  

(not taking in to account capital expenditures and whatnot)

With any real estate investment, there are going to be unexpected capital expenditures at some point down the line and you have to be prepared.

Finally, I was a president of my 5 unit townhouse/condo in roger park, and it was very interesting in how we had to raise our HOA fees in order to meet capital expenditures...it seemed like when our toilets crashed or went away to toilet heaven, all of the others did too.  

We are differing on the utilities, maintenance, capital expenditures, and vacancy rate.  

You were missing Principal and Interest from your mortgage and also Management expenses.Based off of that I put your numbers into it.Rental Income             $2375ExpensesManagement               $190 (8%)Insurance                     $125Capital Expenditures   $71.25 (3%)Taxes                           $325Repairs                        $237.50 (10%)Interest                         $412.50 ($110k @ 4.5%/30 yr)Principal                       $144.85 ($110k @ 4.5%/30 yr)Vacancy                       $118.75 (5%)Electricity                     $250Water ad Serwer          $50Total                             $1924.85Cashflow                      $450.15Looks like pretty good cash flow from that.

Needless to say, they were not happy with my revised offer based on the real numbers and the deal fell through.When I did the due diligence, I went and talked to every tenant (there were less than 20) to verify the financials, walked every inch of the property to look for needed capital expenditures and deferred maintenance, talked directly to the utility companies...

The challenge on your side is that you have education related expenditures happening now and on top of that you want to also invest into cash flow producing properties to offset your current liabilities.

Look for something that was built well and will not need capital expenditures for a couple of years.