The guy who runs it lays it out like this..1-5 rentals you are still doing okay, have more stuff come up between all rentals the closer you get to 5 or at 5.

Note that legal and transfer costs are not deductible but can be added to your cost basis.

Then it sounds like you have your mind made up then right?

The larger the purchase price the greater the spread you need between purchase price plus holding costs plus rehab cost and ARV.  40k projected profit on a 600k project is too skinny for me. 

I ended up with 12 properties and 20k/mo in income after they were paid off.

Purchase price: $90,000 Cash invested: $55,000 Triplex in SE Cleveland (D+ neighborhood)Purchased for 90 and saw 105 for valuation. 25% down plus closing costs and unit repairs has led to about 50-60k going into the deal.

Consider both the financial cost and the time commitment.Have I researched the program?

I've done a few deals where the bank offered purchase + rehab funding up to 75% ARV, and then it converts automatically to a normal mortgage loan at the end of the rehab. 

As you look to scale, just make sure to hold/build reserves for when repairs come up and take your time screening tenants as you will find a vacant unit is much less stressful than dealing with a bad tenant.

Build up job skills, build up savings, and increase your W2 income.