If there's that big of a glut of inventory that 1 in 4 units in the city isn't rented, find some place else to invest.For rent to price ratios (seriously, get rid of CAP rates and all that crap, you're just giving yourself a headache)... 1% is about break even at today's interest rates (6% CoC w/ 4.5% for 30 years & 25% down)... 1.5% is about a 18% CoC return given a 25% down... 2% would be a 30% CoC.These are rough rules of thumb based on the 50% rule for expenses. 

So, you basically have a self managing "rental" with a lot less headaches than a traditional rental.Take that cash from the refi & buy another SFH REO.  

If you could get this place for a screaming good price it would possibly take some of the edge off the headaches it could bring.

They were an older couple, and I felt they deserve to enjoy their retirement without an additional headache.

It will save me some headache given I've already completed the punch out list from the first inspection. 

She stated that the property has been stressing her out and that its a big headache.  

Rationale 1: Your upfront costs are lower but I could see this being more of a headache always fixing things. 

I would think this would give me more options on what/where to purchase although it would come with the headaches of roommate/tenants.

I have wanted to get into real estate for years now but avoided it because my mom (who is also an investor) told me it was a big headache!

As I jneo that dealing with the bank could be a headache