Check out the BP Ultimate Beginner's Guide and then once you've finished that, read "The Millionaire Real Estate Investor" by Gary Keller and "What Every Real Estate Investor Needs To Know About Cash Flow" by Frank Gallinelli. 

According to my calculations, the property should cash flow about $800 per month when fully rented.

However I have a fully rented triplex I recently bought for 28k and didn't put any work into it, it has gross income of nearly 17k/yr and a NOI of a little almost 10k/yr So it's a pretty good deal for cash flow.

They will be sold rehabbed, tenants in place with professional management, and cash flowing.

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You collect fees along the way under scenario 2 as well for acquiring, managing and disposing of the property along with your share of the cash flows.

In the meantime, I have been perusing the retail market and learning about cash flows from the owner perspective.

Not onky that but you can hold on to the cash flow properties till they are paid fully for your retirement so its a short term and long term benefit for both of you guys!

Good cash flow but I looked at what they payed for the property and they basically got it for free.

Lenders use a formula to make sure the cash flow and LTV meet their minimum.You can find 30 amortization due in 30 mortgages for investment properties starting around 5.5%.