Con's- feel like I am wasting money.

So long as you get the property appraised and buy it right, it's really really really hard not to make money on a rental property.

• Civil Integrity: Does the prospective tenant have a civil records history that would influence the type of renter they would be, including any history of previous eviction, owing money to previous landlords or poor landlord references due to payment or behavioral issues? 

I can also record offline payments they give me such as cash, check, money orders.

$70k is a lot of money but you are correct  - in these times you gotta be more strategic if you want any cashflow at all. 

They have ways of making a basement waterproof when they build the house, but that costs more money.

I would add though that you do not have to invest in a traditional vacation market to make money. 

Propwire makes money off the skip tracing.

I would personally use the money for exterior repairs and see what they say/do.

Are there private money lenders who do cash out refinancing deals as an alternative?