Anyway, I'm just checking the other houses in the area to see how much they've sold for and low and behold the city owns 9 of the 14 houses and 2 empty lots in one block!  

However, I hear all the time that interest rates are so low that it's worth it to finance real estate with debt if possible.

I want to be able to carve my own path and not be worried about people telling me "if you're not in your career by 35 you'll be doomed to low-paying jobs." 

I was hoping I'd find support for whether or not it would be a good idea to get hard money for a 25% down payment, traditional financing for the remaining 75%, with all profits (rent less both loan payments-HML and traditional financing, prop tax, insurance, and 10% maintenance fund) going to the hard money lender under the loan is paid off. 

My idea of getting into real estate investing was coming up with 20% of your own money (that's 60k where I live for a low end property), traditional residential mortgage, net maybe $200 a month if I was lucky and repeat the process when I came up with another 20% until I had maybe 40 properties.

The expense includes taxes ($12K), sewage, water, and other various maintenance items.

Properties are generally much cheaper relative to the rent they pull in, than in NY.3) Lower fixed costs - lower real estate taxes for starters relative to your rent roll, etc.4) Lower variable costs - labor is A LOT cheaper here.  5) Less stringent code enforcement.6) Less maintenance - milder weather, and younger average age of homes make for less maintenance.   7) Diversification - low entry price to buy property allows and investor to manage risk by buying properties in different neighborhoods instead of putting more eggs in one basket.In additional to the benefits I listed above the city is growing so fast that homes rent very quickly, often times before the sale of the home.  

I asked my realtor why the low price and the previous owner owes $119k and is trying to leave the area.

I do understand that if I were to resell when the tenants are in place I would need to transfer the money, but I have some small maintenance items I want to address this month and instead of borrowing the money from my bank to make repairs can I use the last month rent money.  

Your lender is giving you an opportunity you wouldn't have otherwise (to buy, rehab, rent, refinance and repeat) and in this instance, looks like a fair (even low) price.