I agree with everything said, just move on from this terrible deal and be happy that you did your due diligence and can sleep comfortably at night. 

However, his credit score is TERRIBLE (528).

I currently have a full time job and a busy life in general but real estate is my passion and so I just purchased my first rental property about a year ago and am itching for another very soon but what I have come to realize is I am absolutely terrible at the tenant screening process... now obviously that poses quite a big issue seeing as screening is the most important thing.

She then proceeded to send us pictures of a terrible and massive leak that came through her front window every time it rained hard. 

I'd say you could go 45 mins out and it wouldn't be terrible.

Updated the worksheet and even if I end up paying 5%, Cash on cash return isn't terrible)PMI $2,400Total OPEX $23,094Net Operating Income $17,946Less:Mortgage Payment $15,432Cash Flow $2,514Less:Depreciation $7,000Add:Principal Payment $374Taxable Income/(Loss) $(4,112)According to my calculations....Loan to Value 95.00%Cash on Cash Return 7.74%Cash Return on Assets 0.91%Capitalization Rate 9.32%Rent Ratio 1.31%Gross Rental Yield 15.71%

@Christopher Brainard man thats a terrible situation.

As it stands, it appears you paid for 2 people 400/day, and think he's only ahead of you 500-800, so that's not terrible.

Not the best neighborhood but not terrible.

It's probably safe to assume that this person places a higher value on dollar figures then they do time... so of course a TK is terrible choice.The problem is that it's far too easy for a "well paid" person to have some disposable income and make a poor investment due to poor due diligence.