Now, if you buy the note at a good discount and have to foreclose, you should not only get your core capital back but most likely make a decent profit on the resale, or you can do a seller finance via land contract and restart your cash flow.

On the face of it, the return numbers themselves don't seem very compelling, but if you're picking up a lot of equity by buying below market, or you have some well-founded reason to believe there will be strong appreciation, then my opinion of the deal might improve.Also, just for clarity, are you assuming 5% each for lost rent and capex, or 5% total?  

The critical item is to find a good core team to help you.

My experience as an investor made me feel compelled to add the bold part!

Most owners avoid it because even though the #s look compelling, it becomes a PITA to manage payments over the long-run.

Eventually I would like to own my own single family residence within the urban core of Portland, but there is a premium for a purchase like that.

Collect a sizable security deposit as it's the only realistic tool you have to compel good tenant behavior.

It does not matter where you start as long as you develop your Core 4.

Marketing and advertising your property: Through long experience, a property manager will know exactly where to market your property and how to craft compelling advertising materials.Finding the right tenants: Experienced property managers are experts at finding good tenants, and will take care of all the details, including the securing all criminal background and security checks, running credit reports, verifying employment, and collecting previous landlord references.Managing tenants: The property manager will handle both routine and emergency maintenance, take care of routine inspections, and manage any situations where conflict resolution is required.Managing vendor relationships: Property management companies have relationships with maintenance workers, tradesmen, contractors, suppliers, and vendors that it's almost impossible for an independent landlord to duplicate.Ensuring that you're in compliance with regulations and property laws: There are a multitude of applicable laws and regulations to abide by when renting and maintaining your rental property.

I'm currently networking and build out a 'core four' to make that first purchase.