Many renters (but not all of course) live pay check to pay check and the biggest issue is that they dont HAVE THE MONEY to pay for another place to go. 

You have to be on top of them because your biggest enemy is this business is TIME.Best of luck.  

Cap rate doesn't factor in one of your biggest costs, the cost of capital.

I have 200k cash for the deal, my biggest concern was just trying to figure out, how much would make it a deal, and how much would not. 

My biggest advice is to build your buyers list so when you do get a deal under contract, you know you can assign it to someone. 

The unique challenge is understanding the neighborhoods and that's one of the biggest mistakes I see new out of state investors make.

For those not in the industry the reason lenders wont go that low is  really simply a math problem.. if they have to stick to their pricing sale 2 and 12 or so and its a 30k loan.. thats a whopping 600 in points and very small amount of interest payments which are always shared with teh investor or credit line or wall st guidance line they have to   HML make money on the delta between what their capital costs and what they can put it out for.. then you have defaults the cost in many of these Eastern states and time lines to foreclosure is hugely expensive and time lines are forever.. so if your only making 1k or 1500 on a file and have to foreclosure you just lost a bunch of dough. it takes no more time or effort to do a 500k HML at 2 points  10k of revenue to lender and the delta on interest of course is much nicer.

My biggest advice is to find a mentor, someone in your area that is doing what you want to do.

The biggest challenge / drawback of the location is parking. 

i don't have a lavish lifestyle (traveling is my biggest expense and i'm still a bargain shopper at that) and i really don't have to leave an inheritance to anyone since i'm single and no kids. lastly, i can also return to my healthcare job if need be or if i get too bored.