I've heard of the same tactic in other judicial foreclosure states and it's frustrating that it comes down to basic math for some borrowers: they wait until the last minute and then decide to pay an attorney $500/month to stall a foreclosure rather then pay $1000/month on their mortgage.

You'll need to do the same for all your other prop-level expenses, like taxes and insurance, so the math will be trickier.

Typically what I do is get the average rental rate for the type of house you are looking to buy (or in your case already purchased) and then just do the math to see if it will cash flow.

its all in my head and on a napkin.. the math is simply too basic for me to delve into it any deeper than that.. plus its all supposition"...I think you need to speculate appreciation, increase of rent/cash-flow, vacancy, CapEX, etc. which may be uncertain and ultimately are numbers you don't know for sure how they are going to play on the long run.  

Anyone that is out there that does not understand capitalization rates need to look it up and study on it and understand the math behind it.

I've done the math and if I buy under $300k, and am able to rent out a basement at $1000k plus utilities, I will still be paying a little of the mortgage, but at least it will go toward an investment instead of my warehouse owner.I guess I wonder if it's legal to not occupy the home, but rent out part of it and run a business out of another part.

Here it is.You must know how to analyze markets to find the micro-markets where you will use your knowledge of How Money Works to execute the part of the plan you have developed to achieve your financial goals, which must include an in depth understanding of the extraordinary impact of compounding, both positively and negatively, as well as an in depth understanding of math...not just how to fill in formulas, but what all the elements of these formulas mean, and how any adjustments made to any of the variable in those formulas have different impact levels on the rest of the equation,....

I’m planning on doing something like this with my property as well so trying to follow the math/logic.

The Math definitely works.

Out of curiosity, to do the math did you account for the rule of thumb 50% rule on additional expenses?