Overall, I expected to pay no capital gains tax seeing as how we lived in the house 4 years out of the +5 years I owned it.

@Michell ChaseEvery state you own property in you need to register as you will eventually have to pay state taxes as well

I owe $345,000. after paying the mortgage and all utilities I would cash flow $500/month. 

I want to pay that debt off and  renovate the houses.

Pay Dirt Flips is her new business!

The extra fees for every little thing are a huge turn-off - $35/day for heated pool and be notified a week in advance OR pay another fee - no thanks. $75 for propane usage - I can go buy a small grill and tank for less than that - again no thanks. 

The state is Florida.I did not consider this first mortgage an issue because I was simply going to live rent and mortgage free in this property myself, rent bedrooms, make good money and recoup my investment in short time (netting 4k income per month if you count not having to pay my current rent).

What is their responsibility if the tenant they place doesn't pay?

He can’t find an apartment in that area for what he is paying.

Sometimes you can talk directly to the owners.Use the Internet - Websites can show you houses that are being sold because the owners couldn't pay their bills or are in other kinds of trouble.Check Public Records - Look at official papers to see if a property owner is behind on taxes or other bills, which could mean they need to sell fast.Study the Market - Learn about how much houses in that area usually sell for and how much you could sell it for after you fix it up.Be Careful - Make sure you investigate the property fully to see if there are any legal problems or money owed on it.By using these steps together, you can find properties that might be a good investment because they need work or are being sold at a lower price than usual.Kind regards,