When you let emotions enter the decision making process where investments are involved, those emotions will cause you to make bad choices due to your "heart" rationalizing bad numbers into good numbers.Also, the solutions to every problem are always in the problem...hidden in plain sight.

It is NOT just an 8% property management fee either, it is familiarity with the market, being able to locate deals, being able to manage renovations, not getting ripped off on repair costs,being able to verify that everything is running as it should be & being able to quickly diagnose/fix when it isn't, not suffering from high turn over from poor tenant screening & management, not spending a fortune on airfare to fix issues, and generally not being 100% reliant on others who may or may not have your best interests at heart to make the investment work.On the other hand, if you study things this way and compare multiple markets, you will see that places that have inexpensive property and high initial cash flow do NOT have high appreciation.

Your profile shows no experience, your first scenario didn't include closing costs or any reserves, it also included a couple of low end units that are not for the faint of heart. 

these types of deals end up with broken hearts and hurt feelings @J Scott  has very valid points.If I was putting the cash into the deal I would want to be on title so I have the right to sell and pay off the lien holders.. of course this can go fine and cumbya and all but it can also lead to a disaster and broken friend ships.the seasoning and flipping rules that J Scott mentions are one of your major stumbles to whoever advised you on at the double close scenario  un less the property is sold for cash.

I have to admit, my heart drops a little every time I see a blog or social media post touting a doomsday scenario the impending crash. 

When we were doing demo, we found a toddler's  shoe in the attic, where the floor boards were not screwed in, in there were huge nails sticking out, scary and your heart just sinks that it's an accident waiting to happen!    

House hack your heart out.

Lastly, work with someone who has the heart of a teacher, not that of a salesman.

But its mental and that can effect your heart.

I'm thinking we should stay in the sub-$100k market (this would include the house and the repair costs) for now until we get our bearings.I hope to have a proposal for him within the next week or so and I'm most definitely going to take all your advice to heart.