Plus, I already gave her a rent reduction earlier this year when we took over because she complained that the vacant unit next to hers was listed for rent at a price cheaper per square foot than her unit. 

F = At least 2 of these criteria are met: within 2 blocks of a homeless shelter, multiple houses within 2 blocks that are burned out/boarded up, recent murders or shootings have taken place there; while you were asleep, someone drove by your rental and shot at/through it,a police officer was shot within 2 blocks

I just got a property for $40,000 less than asking and got another after someone offered about $30,000 more than asking than slammed them with $25,000 in reductions from the inspection- seller walked right back to me.It's easy to find reasons not to buy and you shouldn't buy if you feel this isn't a good market but MPLS still has some of the lowest vacancies rates in the country. 

Is there any reduction in benefit? 

That $9,400 is mostly tax free from depreciation so that would be like a job making 100k a year if not more.Add in the appreciation and debt reduction that those 20 houses are now going on top of that to have going forward and I don't think this would even be close.i.e. after 10 years, those houses might have gone up from 100k to 125k.

We have refused to insure properties because of the fat that there was a double closing and there was no disclosure made

I think it is more important to "trim the fat" from the budget, rather than the always popular political method of charging the taxpayers more in some fashion or another.

A cash offer is likely to win out against an offer of 5-10% higher (or maybe more) when dealing with REOs and other distressed properties, so factor that into your equation before saying it is an 11% reduction in return.

I'm just an old fat guy who is losing his hair, but I save money for my clients.

The first year's cash flow from the property is often referred to as "cash-on-cash" return and you have confused that with ROI.The ROI on a multi-year investment is actually not that simple to calculate, but it would take into account the reduction in your loan balance.BTW, I am not sure from where you got the $2,000 investment figure when your example mentions a $5,000 down payment.