I'd then take that cash and ensure I had a solid reserve account set aside. 

Another angle is to recognize that real estate does follow a cycle and perhaps you might direct your free cashflow to paying down debt or building up reserves rather than chasing prices.

Would you have anything in the reserves just in case something went wrong (it will)? 

Now the real question after saying that is "when is the down turn"All down turns where right after a false flourishing economy (aka the correction), always when governments play God to manipulate the natural economy, always always it will get things jacked up.

Here are the inputs:Purchase Price: $400-450K per propertyDownpayment + Closing Costs: $90-100K per propertyMortgage Payment: $2,000 - $2,200/month assuming $2K/year taxes and $1.5K/year insuranceTotal Monthly Rental Income renting out all the rooms (6 bedrooms x $700 rent per room on avg): $4,200Total Monthly Rental Income renting out all the top rooms (3 x 700) and renting the bottom unit to a family ($1,700): $3,800Total Net Rental Income Before Utilities/Maintenance/Reserves/Capex:  Low: $1,600, High: $2,000Utilities: ~$400 assuming that you pay for everything, internet, heat, electric, gas, water, storm drainageMaintenance/Reserves/Capex: $400 to have enough to cover any items that could need repair, maintenance, etc and accounting for age of house and more wear and tear Total Net Cash Flow Per Month: Low: $800/month High: $1,200/month, Middle: $1,000/monthAlso, I didn't include you adding any extra rental income for for adding utilities to rent/garage spots rent/etc, so these cash flow numbers are very conservative but realistic. 

I found this deal on auction.com; I bid an amount just greater than the reserve amount on the property.

The cost for you to renovate it when that tenant naturally turns is going to be the same or similar to what it would be right now.

After we increase the SFH rent to market value and rent out the apartment, we will cashflow $150 after all expenses, capx, and reserves.

Even if you could buy a duplex with low money down (3.5% FHA), you need reserves of 10k to be safe so until you have money for the downpayment at 3.5%, closing costs, and reserves, just learn and save money.

Hey @Alonso Fernandez Maldonado, I wouldn't recommend getting into anything until you have enough in reserves to cover a few unexpected emergencies.