The issue is it needs gutted , It has water damaged where plumbing line burst and house was vacant at the time.

2) Is the insurance you have in there based on quotes?

Deal seems to cash flow less and less the more I look into it.Rents(under market due to older but decent kitchens and bathrooms): $4,250 total.Mortgage payments including insurance and taxes (earthquake insurance): $2,800 a month.Reserves $800 a month.Water/sewer/garbage: $500 a month proforma...Law mowing: $200 a month.

For example, management not treating tenants in an ethical way (not repairing air conditioning when they were supposed to, or not repairing plumbing or other major issues in a timely manner.)I've also heard some stories of success too, so I say be very cautious.

My monthly mortgage payment is around $1500 (15 year loan at 3.375%) including tax and insurance. 

Check the crime and schools, state, county and city property taxes, insurance rates, tenant/landlord laws and rental market. 

This will put me at approx 26k for normal financing.So I asked him why is the closing cost so high and he responded:Bank fees are approximately three to $4000, transfer tax is 1% of the sales price, and title insurance is typically 1% of the sales price.Does this sound fair?

However you are fined by the govt for not being on Medicare and insurance companies won’t cover you for expenses that Medicare should pay.  

The house is in the probate process and the probate judge just released the house to be sold.The house was built in 1972 and has not had any major upgrades since it was built and there is a plumbing issue going on.

When looking at a property, insure that you are figuring 2% of assessed values regardless of what the current owner is paying.Understand tenant-landlord laws in your markets.