You do not have the problem I have with occupying a home that eats cash every month.

In Bellevue, many properties can be written off without any calculator, as the mortgage payment is so close to the potential rent that you just know it will be eating money every month. 

So my cost on many are almost zero a year since I had great tenants and no PM fee's.you could NO WAY do that with lower value rentals.. tenants would eat you alive.

At some point, the damage the tenant does and drags feet on repairing will out-cost the deposit and at some point start eating into your profit on the rental.  

We could afford a property manager, but, after capex, management costs would eat any profit.

Hello, I am new to BP just discovered the podcasts and am eating them up as fast as possible. 

Ideally I would like to have my cake and eat it as well, by that I mean I want to have the best coverage at the lowest price.

May people use hard money lenders, but the amount you end up paying might eat up any equity in the property.

I find that for lower cost rentals as these (<$700), property management costs quickly eat into your CoC returns pretty quickly.

Lawyer fees would eat you up, especially in a non payment event.Whether your tenants have something to lose in the community and their likelihood of sticking around I think would be primary factors in evaluating their likelihood of repayment.