If instead, I bought 4 of those houses around $50,000 (same amount of $200,000 on Dallas home) I would get at least $2,600 a month in rental gross income.

Here is a live and flip I did in the Clintonville area of Columbus Ohio.  After Realtor fees and closing costs I netted about $67,000k.  I just finished my 3rd live and flip (staying for two years) and am currently lo...

When a C-Corp elects to change it's status to an S-Corp and carries with it accumulated earnings and profit (retained earnings), then the S-Corp cannot generate more than 25% of it's gross receipts from passive income as long as those retained earnings remain in the company.

Big ticket items like that can kill your cash flow in the first couple years.Read "What every real estate investor needs to know about cash flow" by Frank Gallinelli.I know the 50% rule is sometimes polarizing on here, but with a gross of $70k, figure your NOI is closer to $35k and run the numbers based on that for a quick evaluation.Hope this helps.

Says median gross rent is 1,432.The affordability index is off the charts.

Most of the investors I work with look for around 100 gross rent multiplier (GRM) or less, some 110 depending on area. 

Dollar amounts bellow are annual...Rev: $10,800Vacancy (8%)Cap ex estimated at 1% of the purchase price or $770Maintenance estimated at 5% of gross rental revenue or $540Property taxes (last few yrs were $400s) estimated conservatively at $700Insurance est $1000, this feels like the biggest guess to me...Property Mgmt at 8% rent revenue or $864HOA $900 NOI = $5,126Debt service at 4.625% interest (30yr Am Fixed Rate, 20% down) $3,801Free cash flow $1,325Depreciation ($2,852)After Tax Total Return $1,707As for the insurance, I am in the process of getting quotes now.

Outside of real estate investing I've used this to define gross sales less cost of goods sold (but not necessarily less operating expenses), however don't hear it used in REI much. 

in a perfect world, with no vacancy the home will collect 1200 gross rent.  

Six figures gross rents.