Don't forget insurance, title and hazard.   

It seems like these posts always lack in details so I will try to give the most information possible:Sale Price: $575k  Current rent: $6825 (this is topped out, no room to increase)Loan terms: 20% down, 20 year 5 year balloon  5.75% interestsManagement: 7%Insurance: $3200Maintenance/capex: $5000Taxes: $8900Vacancy: Using 5%Property is C class and in good condition (new furnances, roof, etc) No common areas.

FHA has higher fees, an upfront Mortgage Insurance Premium of 1.75% of the balance (rolled into the loan) and .85% MI.  

If the owners do not have an impound account for taxes/insurance are you also making these payments; again what %?

The litigation process is inherently uncertain.This is why having insurance that can cover you is the best first line of defense.

Also get as much insurance as you can for coverage and an umbrella policy.

My biggest hurdle now is the insurance. 

We have done a number of Wrap mortgages and we like using seller financing this way a lot.Banks executing DOS clause for performing notes is EXTREMELY rare in our experience.As long as their payments come in every month and the home remains insured, it would be really surprising to see the bank call the note.   

I am currently self employed as an insurance claims adjuster and have 20+ years experience in the building industry.   

Without having to go to the Bank and getting Owner Financing would be a way to get a low down payment or having to get  "House Hacking" insured loan and having to live there for usually about 12 months.Showing the Owner on paper how that kind of loan how much more he could make and how spreading out their income could reduce their tax liability.