The new wrinkle to the story - my ex-tenant was recently disciplined and reduced in rate by his command, meaning he will be out of the Navy in 8 months due to High Year Tenure.

Third - just doing some very cursory research brought me to the infamous north Texas squatter story and the obscure Adverse Possession law.  

@Stephen Chittenden, great success story.

However, there is a difference between a "Rush in Judgment" and years of experience hearing the same sob story over and over again.A "Rush to Judgment" would be someone who see's an applicant get out of the car, who  look like bums and so you assume they won't qualify for your rental. 

I've read up on a number of success stories that involve investments which you can live in for some time and later flip.

The Indianapolis Business Journal has a story about the neighborhood in this week's edition (see below) .Hidden Gem:  Bates-Hendricks Neighborhood Drawing Attention (IBJ)http://www.ibj.com/articles/53754-hidden-gem-bates...

Last week on 6/17, my wife and I closed on our first home (2 story townhome built in 1997, 3BR 2.5 BA in the Houston area).

Seven years ago, I bought and held a duplex (two flat) that I have been personally managing.

What are some of the horror stories out there when it came to rehabbing a property?

Now if you are getting licensed to buy your own properties and not for a living then that is a different story all together.I do commercial but have 12 years in and others have way more time in than me but I have seen the markets cycle.