The 1% or 2% rule applies to when you're doing a quick evaluation to see if BUYING a property for an investment makes it worthwhile.

I really recommend reading the Ultimate Beginner's Guide (https://www.biggerpockets.com/real-estate-investing) to give yourself some perspective. good luck!!

Definitely check out the BP Podcast and Guides.  

And I realize that I should have a buyer's agent to guide me through the process.

If $2500/month is your only goal and you want it quickly then yeah cheap out of state could work in quantity.

Make sure to read the Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing

Here are some recommendations for you:Find and connect with other BP members that are in your area: http://www.biggerpockets.com/meetSet up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alertsRead Beginner’s Guide: http://www.biggerpockets.com/real-estate-investingCheck out BP Podcasts: http://www.biggerpockets.com/renewsblog/category/podcast/If you wish to tag someone in the conversation on the forum, type @ followed by their name and then select the name of that person which should appear below the comments box.

Thanks for all the quick input.

Question, do i buy one and put most of my money as downpayment to quickly pay it off and move on to the next?

The CAP Rate gives an investor a quick snap-shot of their return on the property's value in that given year.