This makes sense as well and defiantly will learn from this information and I appreciate you taking the time to reply 

There are some areas that will never cash flow, rather where you will get a return on your money is through appreciation when you sell.

It'll be tough to get into a pure investment in your area for 35k but here are a few options:- partner on the second deal- if the numbers make sense and you could get more cashflow then you could look at a higher price point but my guess is this will be difficult to find- Buy your first property as planned, and save the 35k as reserves and/or just keep it for the next down payment on another FHA after a year- find a place that needs some work where you can use that money to fix up and force appreciation to the propertyPersonally, I would look at those last 2 options where you have the cash on hand ready to deploy for the next down payment or rehab costs if needed.

It's a small pocket with lower supply, so if you can get a good deal, you'll likely see some strong appreciation.

Scenario 1 = It looks like you have $950,000 cash to pay off the mortgage balance off.You are getting $70,000 additional cash-flow$70,000 / $950,000 = 7.3% which is not bad considering this is just cash-flow and you likely get an additional 4% appreciation bringing your total return to around 11%The thing to consider is that you would then lose the mortgage interest deduction.Without that deduction, it may put you into taxable income territory.You may want to consider seller financing some of the properties and see if you can get 8% to 10% interest.it would guarantee you a return and still get you nice interest over a period of time.As I get older, I want my investments to be more 'simpler'

Typical rule of thumb is: higher cashflow properties are typically less likely to greatly appreciate as compared to markets with higher demand.

I appreciate your response. 

I really appreciate you us giving a heads up here and am sorry for what you went through with them. 

I appreciate it.  

This is after rent appreciation, as well as selling 5 doors and taking some great profits from market appreciation and paying off other properties to lower our debt - which significantly boosted our cash flow.