I also proposed doing interest only payments and he said he may be open to that as well.Obviously the owners expenses are missing a lot of things so I ran multiple scenarios below:This assumes Interest Only payments on a $1.1 million note.50% expense ratio (I/O payment) cash flow/month = $1887, COC return = 22.6%45% expense ratio (I/O payment) cash flow/month = $2397, COC return = 28.8%40% expense ratio (I/O payment) cash flow/month = $2906, COC return = 34.9% (I believe this will be the closest to true expenses with cap ex, vacancy, maintenance, management fee (although I will self manage)).35% expense ratio (I/O payment) cash flow/month = $3416, COC return = 41.0%Now assuming 30 year AM on same $1.1 million note:50% expense ratio cash flow/month = $156, COC return = 1.9%45% expense ratio cash flow/month = $666, COC return = 8%40% expense ratio cash flow/month = $1175, COC return = 14.1%35% expense ratio cash flow/month = $1685, COC return = 20.2%The market this is in is a cash flow market with minimal appreciation, so that could definitely come into play in 10 years when I have to refi with a bank, especially if I am doing interest only payments.

This makes returns on long term rentals very minimal and short term rental arbitrage nearly impossible (very risky). 

We also want to minimize the likelihood bad tenants.Any advice is much appreciated.

Do minimal repairs to make rent-ready, and have it at least for now as my first rental.I've been speaking with a few folks over the last few months, but I just haven't been able to figure out what would make best sense for me.

I was working on a deal and with minimal Cash on Cash and staggering HOA fees out of state investors are ready to offer full price.

I'd like to minimize the commute if possible (Sabre Springs for Work), but it seems like reasonable SFH prices requires going to Fallbrook.What would you recommend?

I profited more by doing a very minimal amount of work to the property and selling to the commercial investors, than I had planned on making by rehabbing and selling it.

@Jay Ogilvie I purchase my first rental in Philly in cash 2 years ago and did that one all with my own financing to minimize risk while I learned. 

Fair market value of the home after minimal rehab would be roughly 35k.

The homes fair market value after minimal rehab would be around 35k.