Before being approached to help with the development costs, I had considered on buying after the development was complete; 4 lots then having 4 homes built, selling 2 and keeping the other two to rent out.

Asset class, price range, neighborhood type, cash flow/appreciation, whether you want a rental portfolio or get into rehabs...It's easier to start from the goals and work backwards.

I'm wondering if the insurance costs are hiking up the expenses.

Realistically, if rents can't keep up with costs over the longer term, fewer people will buy rentals and there will be fewer options for those who can't afford to or choose not to own a home.

Cah out can be used as an asset and for PITI reserves and a Heloc can "Never" be used as an asset or PITI reserves.I generally work out the options for my clients to compare a cashout to a Heloc so you can see payment to payment, overall costs and rate.

While working on the house to rehab a few small things we have decided to get into real estate investing. 

@Lily Rodriguez your profile says you're a real estate broker, if that's the case I'm shocked that you post on Zillow and not on the MLS for 2 reasons, one according to the association  rules you're required to list all your properties on the MLS (assuming you joined a association) second Zillow is not our friend, Zillow competes with us and tries to push clients to their Premier agents costing the listing agent half a month rent.Quote from @Lily Rodriguez: Marcus,If you want more exposure you can list it on the MLS, and you will have to pay a fee to the agent that brings you the tenant then you will have to do a credit check and background check yourself for each applicant however for my clients I prefer to list it on Zillow rentals only, because I can manage the applications directly from there and the prospective tenant only pays $35 application fee once and can apply for different properties with the same application fee.

Pros: - Low upfront cost- Very high profitability (we average 23k per deal of profit) and the ROI is AMAZING- Sustainability - so many land owners out there don't want their landCons- Can take 4-6 months or so to see results- Marketing is expensive, we send mail to acquire properties.

I've seen a lot of conflicting advice that cautions to avoid areas with high crime rates due to complications and extra costs from the tenant base and property crime.I understand that both cities have shown crime rate improvements, but their overall rates are still way above average.What makes these cities attractive for investment despite this?

all but the 10% of reno costs up front have personally seen that one.. pricing is for sure regional..