Third, the Minneapolis area has high wages, low vacancy, and higher-than-average appreciation.

What is normally done, is it typical that they get paid regardless of their performance, or lack of performance?

That way, you can sell the re-performer for more.

In exchange, the turneky company is the one that benefits from the spread between what they put into the prop and the market price they sell to you at (should be market price, a reputable company won't inflate their values and third-party appraisals should back up their prices).

If so it will add another layer of complexity, otherwise there are plenty of third party section 8 managers out there.  

Based on this metric alone this portfolio won't cashflow with 75% debt.You're assuming 100% occupancy and it may happen from time to time but the property needs to perform at 90% occupancy or below.Even at 100% occupancy ($18K/mo) it won't cashflow because of expenses. $5000/unit/year is $8333/mo.

@Mike Lee this is our third and fourth acquisition in the area, with our fifth closing next week.

YOu can look for non-performing notes, 2nds, be a lender, participate passively, etc.The landlord and rehabber are just the routes that most people take.

So really right in line with historical stock market returns.The beauty of real estate is the it is 1) much easier to buy advantageously (get a good deal) than with stocks--at least for the average person, 2) you can also buy, even without leverage, properties that out perform the stock market, and 3) you can safely leverage 70% to 95% without much difficulty, making your money work much harder for you. 

Potentially lower your wholesale spread on the deal to make it more desirable, back out, buy it your self, or you could perform an option as opposed to an assignment.