Also if you are coliving with your tenant, make sure you clearly write out what the responsibility of the tenants are (who takes care of the yard, common areas, utilities, etc.)

They will typically take better care of the home because they hope to be owners someday.They will typically not take the purchase option and you can do it all over again. 

Usually seller demands big upfront payment and could care less if buyer follows through or defaults. 

For $50/month we get to deal with rigorous screening of less than ideal tenants, constant calls from tenants, damage to the property every time we turn around because people do not care about things in this class of property, Section 8 and the government (who doesnt love to deal with the governement), maintenance requests because none of the plumbing is updated, codes enforcement because the tenant decided it was a great idea to put a couch in the yard, and last but not least angry owners wondering why their pro forma isnt being met ("I was gunna get a 75% COC on this thing").Now this is a pessimistic view of what it is like but PM is a pretty thankless job, especially in low end properties.

Frankly we haven't had enough turnover for it to be much of an issue.

Then you'd only need 3-5% down....some lenders are even offering 0% down but there is a bit of an extra fee.

And seeing as this money is retirement money that I previously had 'safely' tucked into the stock market I'm even more careful about it.  

Based on my research, the greater Phoenix area is not much better than Calif when it comes to the cap rate.I would like to stay within a 2 hour flight distance if I would ever need to make a visit to take care of business being that I still have a day job and time will be a limited resource.

Just be cautious of all the carefully disguised ads on the site.

Overall they have taken excellent care of the house.