During the term period, do i take over mortgage payments and pay the seller a rental fee/rental premium from the cash flow?

Cash flow is better here, but appreciation is less (CA is off the charts for this metric compared to most of the country, so it's not that OK is bad- depends on your goals and expectations). 

If you are cash, lets chat.

I've been told Cash for keys is a good method but how do you go about doing that?

If those do not work then go buy a rental that does not cash flow. :) 

But the idea of solving the water problem in a way that generates cash flow intrigues me. 

@Mohamad Guene  Simple answer - you will be cash flow negative, and your appreciation will be limited.We did a new build once for a rental - it performed miserably cash flow wise despite a great location and property - we ended up selling it 3 years later.There are very few new builds in Huntsville proper - are you referring to an outlying area like New Market or Meridianville?

Rentometer provided a rent range of $1,852 to $2,258, which is a very wide range.Below is the cash flow for this property based on the low, median, and high Rentometer rent projections.Depending on the Rentometer rent estimate you choose, you will either incur a loss of $94 per month or make a profit of $312 per month.

My primary goal is long term appreciation and I'll accept a property that breaks even on cash flow.

And all the duplexes that would be big enough is way too expensive and wouldn't allow us to cash flow and still would cause us to not qualify for another loan.