I believe it is a common theme that when a lender advertises 9-12%, 9% is for the highest qualified applicants and 12% is for the people who are just above the minimums to lend on (i.e. beginners with low credit).Usually, the lenders that go down below 10% are national hard-money lenders and will not allow the borrower to put less than 10% of the total cost into the property.

I also include utilities in the rent so adding a second person increases the utility usage and costs me another $30 or more a month.

I’m renting rooms in my house for $725-$850 with paid utilities.

Can't be rezoned because of that, can't be subdivided, and again more engineering and issues with no utilities out there and such I wasn't sure about... was still interested but it went for ~$32k. 

I have used several of the most common beginner strategies in order to acquire real estate and grow my portfolio.

You still have utilities, taxes, insurance, realtor commissions,...

Your cash flow is basically rent minus mortgage P&I, property taxes, insurance, income taxes, local fees, utilities (if you pay any), repairs, management, vacancy, evictions and capex items.

If I decide to go with model of covering all utilities then rent would be $550-600 a month per student.  

To be successful at the technique you have to be pretty shrewed and willing to push the Caveat Emptor factor on your buyers, or you have to be very, very, very good at finding REAL legit good deals (this is not super common). 

What your describing is a very common interim strategy to retirement.