You're still going to find a wide variety of tenants there, more low income than not, but the area is well positioned for appreciation over the next 5 years.

Hoping for some feedback on the water issue.

You do realize, that any and all contributions you make out of your own cash towards the mortgage, in the interest of netting higher positive (less negative) cash flow, is just paying all that negative cash flow upfront.You need someone else to contribute towards it...like the tenant will be when you move out. 

Any feedback I would be greatly appreciated.

It looks like this:ARV x 70% = All-in Costs Target - Rehab Costs - Holding Costs - Closing Costs =Maximum Allowable Offer or Purchase price If you can follow this formula you should always be able to get all or most of your cash back.Now to make sure you have positive cash flow you still need to be as close to the 1% rule as possible.  

Thanks for the feedback. 

As long as you have positive cash flow there is very little risk with leverage.

Awesome -  thanks for the feedback everyone!

I think the Midwest is in a better position unless you already have some rentals in Dallas and want to keep them concentrated.

@Myka Artis Great ideas and feedback, thank you!