Did you pull the credit scores for these applicants, talk to their previous landlord (not present) did you confirm their employment through viewing consecutive pay checks etc.

my jaded view!

The members (including myself) would like to take out a mortgage on the property (i.e 30 year since the interest rates are so low) to pay the money owed to me, but wasn't sure if this would even work (not sure how a mortgage company would view the promissory note).

Once the listing is expired or canceled, there is no restriction and it is often viewed as a prime prospect.

In this case $1000 is 2% of $50,000 so it meets the 2% rule but again the cash on cash is 48%.not directly related to your question but CAP rate is the yearly percentage of the total capital in a deal that is recovered.so on our $50,000 house with a $400 cash flow the cap rate is 9.6%$4800 net income per year is 9.6% of $50,000In summary cash on cash can give you an idea of what your returns are while taking leverage into account, while CAP rate is better used to look at the viability of a deal with more of a birds eye view, the 2% rule is a general guideline to see if a rental stacks compared to others.

Others may have different view points.

Very often an issue has two different opinions and sometimes two people can have different views.

Make sure to view the Bigger Pockets book store: https://www.biggerpockets.com/store

One of the landlord/tenant attorneys in your locality would have a better sense of how the local judges would view the situation.

Would you suggest paying a contractor to come view the property with me to get an idea?