@Natalie OlivoYour gut (instinct) is telling you something is not right with this deal ... as Karen alluded.Let's look at the red flags you have presented:1) Rents are 40 - 50% below market.  

I live east of Parker, so I am considering the Parker, Castle Rock, Elizabeth, Franktown, Centennial, southern Aurora areas, and maybe even further West into the more southern region of the Denver Metro area.  

This is an input (note it's in red). 

This person has a good, long-time job, but when I subtract their after-tax salary from their monthly debt payments (including the cost of renting the house I am advertising), it's in the red by $900.

Any place you invest you need to have one of the following be true in my opinion:1) purchase considerably below market value (very challenging in a red hot market)2) force appreciation though increase rents or rehab (easier if you have skills/desire/patience)3) be able/willing to wait for the next cycle (5, 7,10,15, 30 years, think Texas in the late 80s)4) have great positive cash flow that you can weather rent loss or massive reductions in rent to the tune of 30-50%.

You really need to know the nitty-gritty about each.You mentioned that it had flooded during Hurricane Sandy - could be a big red flag.

Probably why the Federal Reserve interest rate has remained so low for so long now.Stupid investors are the reason for Australia being stuck in a rock and a hard place, so... yes there are a lot of them out there.

Get at least 10 buyers on your buyer list before looking for houses.Then...To find wholesale deals the city code violation list is a good start but make sure these are properties which are red tagged as not habitable, not just a fence falling down or tall grass.  

Anyone who is lending through a business entity, where the majority of income for that entity is generated by lending activities is NOT a private money lender, they are "in the business of" lending.So, if you see someone soliciting loans calling themselves a private lender, a red flag should be going up, that red flag simply means to stop and do some due diligence before you make a borrowing decision.

John Daniello , generally hard money lenders only lend to entities and not owner occupants.It is possible that is who your agent sent you to, but there are a few red flags.