Knowing that others also had similar concerns does give me confidence that I am asking the right questions.

THEN I assign a confidence level for each line that I used to create a low estimate and high estimate.

All and all I can say confidently I don't need the rental to be profitable right off the bat.

Increase cash reserves for larger purchases.

If you have ran your numbers and are confident that you like the property, move forward with the deal. 

Purchasing with a mortgage can increase this return to 12-18% pretty easily.

I've always been self employed, but if you have a stable W2 job, lender underwriting should be pretty easy and painless to get approved for a loan and see what you qualify for on financing.Good luck!

All he did was send self addressed envelopes for her to send the checks every month. 

It is resulting in increase to housing costs and poor returns for the hands off investor.  

The shorter the prepayment term has an impact on increasing the rate.4.