However, full disclaimer, my ROTH IRA and 401K are strict indexes and mutual funds.

In addition, I would investigate if the on-site manager is full-time or is only on-site for a specified period of the week.

I'm planning on revising our budget so we can bank my full income in 2019 which would give us about 40k+ cash to play with if all goes well.

I know you cannot predict everything but  just have mindset to do not give up and fight through it all and try to have back up plan if possible.

I will add that while neither was purchased with the knowledge and full analysis of being an income producing property, the area is strong enough to support the homes as such, and we will even be able to have a (very) small cash flow within the first year. 

I can pay for the downpayment via my savings, but the property appears to need a full rehab for both units. 

The neighborhood is pleasant, except we have a next door home wherein 2-3 families are living in , the property is unkempt to say the least, usually someone is arguing and or fighting in the home, place reeks of marijuana and they have 3-4 dogs and 1 of the dogs they can't really control.Not sure if I'm being too overly cautious but I feel I can't in good conscience rent my home to another family knowing all I know with the nextdoor neighbor.Should I start from scratch and sell the house and buy a new property or keep and rent the house and buy a new property?

Paul Moore was amazing i'm blown away with everything he has done.

Greg:    First, do not get discouraged by anyone, someone else is doing it so you can, not going to be easy.If not done already I suggest to look into this:Enforce that PM uses a great website for rental screening, ones with a background check and choose the best tenants possible.Review you leases to close any pitfalls and enforce the lease to the T.Keep the units in good shape and keep extra cash reserves ( fixing + trip expenses )Tiger than normal lookup on the PM ( have second PM line up ), vacancies, unit showing costs, repairs, fees, etc,  require a once a week normal operations report and a once a month full operations report.Family, friend on virtual assistant that regularly drive by the property and reports to you, or if cash flow allows and deem beneficial you can install security cameras and remote view activity on the property, nowadays there are lots of options.Check if feasible to get a home warranty plan for the units so some pain issues are self-managed by the tenant via a phone call to the warranting companyIn which city/state is the property? 

I'm a full time realtor and work with several investors throughout the year.