If you are worried about covering the debt service when the property is vacant then make sure you have sufficient cash reserves to not only cover emergency repairs, but several months of debt service and you will be in a good situation.

A POLL OF THE AMERICAN ECONOMIC ASSOCIATION FOUND 93 PERCENT OF ITS MEMBERS AGREEING THAT ''A CEILING ON RENTS REDUCES THE QUALITY AND QUANTITY OF HOUSING.'' 

You will also have to find out where the existing house is on the lots, and make sure that you have sufficient setbacks to the lot lines to split them up (i.e. if the zoning required 10ft minimum side yard width, the house would have to be at least 10ft from the lot line of the property you plan on separating).

Quality, not quantity.

I will interview his past Buyers and find out how accurate the ARV numbers were.2) Sufficient cash to close all purchase agreements made, so as to keep their word to their seller if they can't flip it to a buyer.   

Once you refinance your original owner-occupier loan into a conventional investment loan (presuming that you have sufficient equity built up, and the rent return would sustain positive cash flow even at 75% LTV with the higher interest rate), your next low interest owner-occupier loan can still happen for your next primary. 

(And they are quite lax in our area)No windows in the window openings.Sewage draining into the basement.Exterior door knobs that do not work (or missing doors), so the house cannot be secured.Broken stairs that someone could fall through if they step in the wrong place.I could go on, but these are sufficient. 

It’s all the tenants money I would be applying to pay the loans down.My thinking was at some point when you have sufficient doors/cash flow, then pay it all down. 

It's not the quantity of time you spend with them, it's the quality.

Caveat is that turnkeys sell for the high-end of market value, so disposal in the first few years will likely lose moneyCONSSpecific market and asset risk is long-term (per property - mitigate by diversifying across different markets and property types)Spreading risk across multiple assets and markets requires multiple investments and quite a bit of due diligenceTurnkey properties (along with most other single-family homes) are becoming harder to acquire and thus more expensive, compressing returns and making it harder to find properties to buy with solid cashflowPortfolio risk from individual units is high (until sufficient number of doors achieved to mitigate this risk)Using leverage requires qualifying with personal credit - may become harder/more expensive with recently-announced changes at Fannie MayRequires some effort (to "manage the property manager") and decisions required at some point for capital expendituresQUESTIONSWhat unique risks are there with the turnkey single-family rental model?