And then dealing with the 20% of residents who cause 80% of your time to be used - what a pain.

That doesn't happen if you are doing a couple deals for yourself every year. 

The original deal I had fell through from first post.

Though, you need to make sure you've done your due diligence and know your numbers going into the deal. 

My first deal cash flowed $300 a month, and the second $500.

A few management companies I worked for in the past had full time employees just dealing with leases and trying to obtain information from owners.

If you invested in Phoenix or Tucson, you could drive over and deal with it.At this point, I would  have an attorney in the county the properties are in send a demand letter.

For example, I know of a deal in Reno, NV where all the records were still on paper, and the owners didn’t even know the rents people were paying.When I’m evaluating multifamily properties for clients around the Reno area, I calculate current, market, and proforma rents.

I requested copies of the income taxes for them both and it looks like this could be a pretty good deal but I'm not sure how much he spends on materials to keep them running as that was not included in his "financial report" (which was a piece of paper with number written for utilities).

And I actually like the ones that I have to dig harder for because they tend to be even better deals.