You also need to be solvent and pay your debts. 

@Wynn Meyer So after Debt services, I would be looking at roughly putting $260/month to pay the mortgage.

It helps to understand the many ways investors calculate ROI and the definitions used such as capitalization rate, net operating income, debt service,  cash on cash return, etc.In your question you use very broad numbers.

Where's the bad debt?

As I understand, the recent CFPB settlement that punishes Ocwen for reprehensible actions related to foreclosures ALSO mandates Ocwen spend 2Billion on principle reductions for underwater homeowners.I believe Ocwen was supposed to initiate contact with "eligible" homeowners.

At least now it appears that buying  a subordinated debt has less risk if the borrower files BK with all other things being equal.

I hear “speakers” talk about borrowing Private or Hard Money to finance a deal and not to worry because “the property stands for the debt”.

We have no college education but we also have no debt.

@Jane Irwin  who takes on the debt ... ? 

Cash-on-Cash Return Cash-on-Cash, the popular real estate investing return, is explained including its meaning, shortcoming, and formulation...Debt Coverage Ratio (DCR) A ratio investors and lenders use to track and compare debt-related outcomes for rental property and measure financial risk...Gross Rent Multiplier (GRM) A quick and easy way to determine whether or not a property is priced in line with other similar-type properties...Internal Rate of Return (IRR) The time value computation that shows the ratio between future cash flows and initial cash investment as a percentage...Loan-to-Value (LTV) A computation related to mortgages that lenders use when financing investment property as a measurement of their financial risk...The Maximum Purchase Price Calculation A calculation investors can make to determine the maximum price they can pay for an income property to at least break-even and avoid a negative cash flow...How to Compute Net Present Value Net present value is explained along with its formulation and use in real estate investing...Profitability Index The time value computation that shows the 'proportion' of dollars returned to dollars invested rather than the amount...Rental Income Property Cash Flow A fundamental look at rental income property cash flow for those of you new to real estate investing...Sinking Fund Factor Know the amount you you must start setting aside on a regular basis now to cover a capital expenditure scheduled in the future...Tax MattersIncome Property Operating Expenses and the IRS Tax Code Learn what operating expenses should be included in a rental property analysis as well as what the tax code says about operating expense deductions...The Recapture Tax Real Estate Investors Face When They Sell The seldom expected recapture tax real estate investors expect to owe the Feds after they sell their rental income property....The Cash Flow After Tax Calculation How to calculate cash flow after tax step-by-step starting at the gross scheduled income...The Depreciation Allowance According to the IRS Tax Code How the IRS figures the depreciation allowance for investment real estate along with its concept, limitations, and formulation...Understanding Rental Property Depreciation and Recapture Tax Rental property depreciation allowance and the recapture tax associated with it are explained...AnalysisCap Rate or GRM?