But as you said, it takes a quality renovation team, quality property management, and quality business partners.

And therein lies the risk of high-leverage.  

I spend 1 hr (on the high side) per month managing. 

If you can come in and operate effectively I think you'll find success rather quickly due to that.BTW - for a property management platform I would highly recommend Buildium.

I had 5 houses with them that were terribly managed (placing bad tenants, extremely high rehab costs). 

Also North Providence is a great area, so you should have no problem finding quality tenants.

You still claim the income as miscellaneous income and deduct property taxes and mortgage interest (subject to SALT and other high mortgage limitations) on your Schedule A, but that's it.2. 

Being a real estate professional allows you to treat the income as non-passive, allowing higher high income tax payers to pay less in taxes.

Because of it's not going to appraise that high, I could finish the basement fairly easily.

If prices are too high people will just go elsewhere.