Prob same for insurance.---* If this wasn't an A area I'd flip it, but do things change in A areas? 

In my mind:Seller wants $250kOffer $225k 20% down7% interest only on the remaining $180k2yr ballonPayment is roughly $1,080 interest$12,960yr x 2 = 25,920 + $225,000 = $250,920Gross rental income is $3,050Minus my management, taxes, insurance, etc... stillWould roughly put me at $1,300-1,400 positiveAm I on the right path or where can I tweak things?

If you have 50 homeowners all competing for 5 people that can repair or replace you will have skyrocketing prices.

In regards to estate planning and assisted living, my mom is considering long-term care insurance to help with her living costs once she retires. 

2) Is the insurance you have in there based on quotes?

I know FHA and other primary mortgages have a 1 year stipulation for homeowner use and certain reasons you can be excluded from that requirement.

Deal seems to cash flow less and less the more I look into it.Rents(under market due to older but decent kitchens and bathrooms): $4,250 total.Mortgage payments including insurance and taxes (earthquake insurance): $2,800 a month.Reserves $800 a month.Water/sewer/garbage: $500 a month proforma...Law mowing: $200 a month.

Verifying numbers is pretty straightforward- check tax assessor info for property taxes, get an insurance quote, contact a 3rd party property management company and see what they'd guess as being a realistic rent income, etc.

They get their deals by contacting home owners directly.

My monthly mortgage payment is around $1500 (15 year loan at 3.375%) including tax and insurance.