Purchased for $9k and seller put in $50k of renovations.Buyer to pay $4000 toward commission at lease signing and seller to pay remaining commission plus seller agent feeSale price of $72,000… Lease payment to be $685 month.Lease payment to have principle reduction as if we had a note for $72,000 for 420 months @ 7.5%

Cash flow is no more an important metric than a dividend is to a stock.

I told them that if they would apply all previous payments (aprox $30k) toward principle we would cash them out with $120k. 

I've just been using in stock brown home depot cabinets, seem to be ok, people seem to like them but I'm wondering if white would be better..

In my areas there is a shortage of GOOD housing stock for tenants, many other landlords are slumlords, but if you do a good job, have the RIGHT MANAGEMENT TEAM in place there is money to be made (but its not easy, if it was easy everyone would be rich).

(When it comes  to real estate and note education, my working principle is, the more they charge the less it is worth.)  

It is interesting, easy to read (though not well written), and illustrates some principles in a creative way but it is not entirely accurate.

Charles Schwab says the stock market returns are expected to be 6.3% annually for the next 10 years, so 7% is e-z money for them. 

If the investor can make the same amount of profit in the stock market without having to do all of the work of rehabbing a property, why would he take the risk of buying the property?

On top of that, based on your math, that $250/month cash flow becomes a negative $250/month cash flow when you spend the extra $500 on the principle each month.4 - If you took that extra $500/month, plus the $250/month (cash flow) and put it aside, you'd have almost $10k saved per year.