After a comprehensive gut there are now tenants with excellent credit and good jobs. 

You also need a bigger margin than normal because HOA's can often go up without your control and they also can do special (or year end) assessments and tack on more charges you are unprepared for.

Property Taxes: Your tax rate will probably be about 1% of assessed value so expect to pay a little more than $8,000 per year on an $800,000 house.

Also be aware of possible special assessments the HOA may impose due to capital expense projects.

Can you assess what a sale price would be in that market today?

Then assess how long it would take to recover the investment from the increased rents or if the property can then be refinanced for you to recover your investment.  

I am looking for "lesser" properties, which I define as being fairly assessed (note I said fairly) at $120,000 or below.  

So she asked me the difference between Assessed & Market Value.  

As far as your example, it's kind of hard to assess with so little info.  

That being said, generally fees incurred in pursuing legal action can not be assessed as additional rent, and must be explicitly provided for by a court order.