Some lenders may offer to cover closing costs in return for a higher interest rate.

This is not the approach for a typical investor that is looking for returns.

Do you really want to be operating a business.I would sell and invest the money in a income fund of some type that could probably generate a 8 - 10% return without a problem.Let your children get loans if necessary.

on my tax return?

The difference of fair market value versus what you pay would likely be considered a gift to you, which may require the filing of a gift tax return, and would eat into their lifetime exclusion depending on the amount of the gift. 

I look for 10% COC returns as you can see in the model and per my analysis, you would reach that by lowering your offer.AssumptionsDownpayment: 20%Closing Cost: 6%Amortization: 25 yrsInt Rate: 5.3%Occupancy: 90%Purchase price: $240kPurchase Price: $160k* I hope this helps and makes sense.

When he returned I issued him a non-renewal of lease notice and he had 30 days to vacate.

Just helpful criticism.The deal is a little light on the cash return at 8% but not bad.

You could leverage that and purchase a 1 million dollar property, or if you are accredited you could invest that passively with a syndication and probably see a 12- 15% return. 

If your skill set is fairly well developed, and you understand creative finance, then making 10% is a terrible return.