Recently one of my clients purchased a $120k single family house and is currently renting it out for $1550/mo. 

I do have a client with almost similar situation.

Reporting begins when it's placed in service, not when it’s first rented.This post does not create a CPA-Client relationship.

Just this month, I’ve gotten under contract for my clients for multiple 20%+ cash on cash rental properties so there’s definitely tons of opportunity here.

I suggest that you make it a point of finding a good lender, not just someone who can do the job of helping your clients buy their home but someone who is willing to teach you.

While I don't know the nuances of the market, I do have a client that's a real estate investor and agent in Phoenix that could probably give you some suggestions.

There are very few people who accomplish this and when they do, it's over a sustained period of time.

@Matt SchreiberWe always joke, "if you pay cash, everything cash flows"....There are still opportunities out there and we've been able to get way off of asking for clients here in Reno, NV with the right seller and right offer. 

There are many of us that are long time repeat clients on both ends of lending and borrowing that have worked with them for years and we are all very satisfied.

*This post does not create an attorney-client or CPA-client relationship.