Guessing at a few numbers, let's say you net $8576 (I did 5% vacancy and another $1k for maintenance, etc).

Rents were a little lower than expected, so I'm guessing it wouldn't be too good of a deal, especially if he's not really being forthcoming with the expense info.

It did not seem worth it for ~$600/month, I started second guessing the whole deal.

So I guess my options are to Rent out our Paid Off home and use an FHA or 203k loan to buy our next home(for a hell of a deal of course) or should I just take a loan out to buy a rental home and stay put?

His business was grossly mismanaged the building almost went to auction for taxes this month, so I guess the next step is to see if I can get a copy of the returns to a CPA to see if there is any depreciation left, or if he mismanaged those as bad as he did everything else, and left all the meat on the bone.

So, I am guessing if you have a family, your insurance will run around 15-16k a year.

If you are over in the waukegan area schools, I would guess some of this may be higher given that rents are lower and that can cause different types of tenants to have to rent to.For my single family investment, I just use a simple repairs, cap ex, vacancy expense. 

I guess he was brought an offer and knew we had an interest if ever the opportunity presented itself.

well, BRRRR is usually a rental cash flow play... but if it is pretty much a wash monthly... then it works I guess for appreciation too... just a lot of risk for vacancy at that price point...  

I guess it truly comes down to if I live with my roommmates in a home closer to downtown (which I would enjoy as well); I would have more control of the tenants as they are my college roommates and long time friends.