I only invest in Alamance County and he handles all my rentals.

I only paid interest.

As a result, any negative grading will let water flow towards the house into the foundation which means degradation of the foundation and water in the basement. 

Any downturn or tenant issue can make your COC rate go negative and then you can be in lots of trouble. 

I only have $40k in savings and currently have one rental with about approximately $80k in equity I am able to pull out if needed.

…Hands On inspection of each POH (Be sure to identify SCRAP homes and assign a negative value)Professional inspection of on-site electrical systems (document any deficiencies); Are box amperages up to code?

Everyone above makes great points...we know the negatives about NJ (high property taxes and home values, corresponding difficulty finding cash flow, etc.)...With that said, every market has deals.

I only charge a tenant for a repair if it is CLEAR it was their action that caused the issue.... 

The negatives are that it really doesn't cash flow - granted, our criteria for cash flow is based on a commercial loan with a 15 year amortization, not a personal loan at 30 year amortization. 

The next steps we took:Found a couple of groups to network with (local and out of State)Found a group to play Kiyosaki's cash flow- learned through the game & created some relationshipsFound a few lenders (Hard Money,Private and Banking) I only used the bank for my first multifamily that I lived in.