The rate that you'll pay for a HELOC will be significantly lower in almost every case versus using hard money. 

@yoann mamy randriamihaja The FHA inspector is approximately $1,000 versus the normal $300-400, permit costs will be out of pocket, and closing costs can run $1,000-$2,500 over standard closing.  

.$640 x 12 months =$7680 - Your cash flow for the year.Going back and looking at the fact that you invested only $30,000 cash, we will calculate the cap rate using only the cash involved:$7680 divided by $30,000= 25%You can see now that using cash only versus a high interest mortgage for this market is significantly increasing your cap rate. 25% vs 13.3%.Using the same scenario, you can use buy 3 homes with the same $90,000 and have a total cash flow of $7680 x 3 = $23,040 versus using all the cash in one home and getting $12,000 per year cash flow.There are other factors to consider of course...

I think as a longterm hold it could be smart bet in the right location.  

Jim,I don't think it is a crazy idea to self manage the property until you get a few more properties but here are some things to consider with a property that is an hour away.1) Condition of property - if the building is older you may possibly have more maintenance to consider versus something that is newer.2) When there are minor maintenance calls, I often have a handyman to go over while tenants are home and fix the issue, I confirm with the tenants that everything is okay, and pay the handyman.

My coffee mug is older than most members on BP I'd bet! 

For Sub2, Scott Horne is one of your best bets: http://hornerealestatelaw.comChad

I'd bet the clients would be more concerned about their safety with him around than the agent would be without him being around.

Which neighborhoods are good bets?

Depending on the cost of the damage versus what your premium might go up, it's probably worth a call to your provider.