A broker from Marcus & Millichap told me that this exact strategy can provide excellent Return on Investment if done right.

Ask for tax returns.

(Yes, I know how to vet PMs.)Lots of CapEx in the past two years, mostly updated units.New roofs / new plumbing in most / new HVAC / etc.)Block bombproof constructionProperty has been cranking out greatly increased cash flow each year.2016 - the true net after ALL expenses, management, and repairswas about $800/month2017 - the true net after ALL expenses, management, and repairswas about $1,200/month2018 - so far this year, the true net after ALL expenses, management, and repairs is about $1,600/monthI have actual bank statements / tax returns / P&Ls to verify all of thisMany tenants have been there for 5+ yearsVery low vacancy rateAll tenants current on rentThe negatives:Neighborhood is terrible.

I called the tenant and left a voicemail she texted me back (she would only text) saying that her daughter had to have surgery and she would return that following Tuesday.

Under their leadership, I have a negative return rate (before depreciation) of around 68k after rents and expenses over 3 years, so I backed off.  

@Forrest Williams High crime areas is no good for anyone, unless you want to kid shot.In saying that, some people with experience don't mined working in lower demographic areas, BUT the returns are often not as good as they look on paper. 

It's the rate of return on a real estate investment property based on the income that the property is expected to generate. 

After returning home from a deployment in Feb, I immediately decided to turn my IRA into a Self Directed IRA and use the money to get started in REI.

If you are just starting out, I would suggest partnering with some great Realtors and communicate with them that you are wanting to learn the business and in return for their expertise, you will be giving them deals.

My general rule is avoid east germantown even though the returns look nice the quality of people will suck the time and money out of you.