As others have pointed out, Chicago and Austin have gotten pretty pricey and TX has some of the highest property taxes and insurance rates  in the country making it hard to cash flow.

Insurance should also be more in the $70-$80 per month area for this kind of property. 

Use the same format as on Schedule E.I would also not only carry insurance on the rental property but add an "umbrella" policy.

The quandary I am in is that most of the money that the properties produce goes out the door to pay the expenses (mortgage, maintenance, capex, vacancy, insurance, PM fees, utilities, taxes etc).

If yes, you will have to cover monthly expenses such as mortgage payments, insurance, utilities, HOA fees, etc.  

So get this even though my  personal LLC is a licensed Developer with insurance and bond.. the home I bought and was working on in Salem in another of my 14 LLC's did not have the specific license even though I am the owner of that LLC and managing member that is licensed.. the actual LLC needs the license /  or you can skip that and be a GC.

Hi Jason,Based on the difference between rent and mortgage payment ( I am assuming it includes taxes and insurance), there is very little cash flow for maintenance, vacancy, and all other expenses while renting (50% rule),  I will sale now that El Paso is a seller's market for properties under $120k.Good luck,Jaime

However, always protect yourself with sufficient insurance coverage and good contracts if you're operating as a general partnership/joint venture.

The contract says the seller pays for the title insurance.3) Please let me know if you think I am overlooking anything else important here...Thanks!

Your insurance that you carry with an umbrella would be good enough.