His closing costs and outstanding mortgage would be deducted from his proceeds, let's estimate that he walks away with If $175k.

That's highway robbery!

We have outstanding occupancy (in the high 90%) at a rate that is basically the same as LTR.  

It's pointless to ask "what-if-I-fall" because you will 100%, I guarantee you WILL make mistakes, there will be failings, and as long as you mitigate them into a safe setting so they are survivable ones, like learning to ride a bike in a lawn vs out on a highway, or in REI using an experienced REI Realtor/Consultant and experienced PM's vs on own for everything, your going to get through it and be all the better for the experience. 

Even if a property is 3 miles away, you will notice price difference if it falls on the other side of the highway for example.

I used to work near SW Military and New Laredo highway in a low income area and absolutely loved it.

These days the AM probably needs to be at the property weekly to get thru the crunch in many cases unless you just have an unusual or outstanding PM team.   

Payoff as much outstanding debt to get the DTI down.

My outstanding loan balance is 163K @ 3.5%I calculated that I'd clear 900/mo after expenses.I was planning to buy my new house for cash, but with the market where I'm moving/buying I'm having to go about 100K over what I was planning, so I'm taking out a 50K loan for that property.

we live in Ontario and invest in Detroit  and I love the city  but one has to be more the careful and make sure their team on the gourd is outstanding...but the returns are great  and the people we have met have been wonderful  more then willing to share out story with anyone who wants to chat