@John Mayer Excellent, not sure how capital gains taxes work with inherited properties, but selling it would get you a good chunk of cash to invest, and you could probably achieve your goal a lot sooner!
Assuming that you have to pay taxes, closing costs, realtor fees, etc, and you are left with 300K to invest, here's how I would invest it in the Denver market to achieve your goals:
I would buy three large single family homes (6+ bedrooms, 3+ bathrooms) with basement apartments with separate entrances that cost between 400-450K with 20% downpayments in Westminster, Lakewood, Englewood, Thornton, or Northglenn, also, these houses would ideally be separated from the top and bottom (ex. 3 bedrooms 2 bathrooms upstairs, 3 bedrooms 1 bathroom downstairs), so you could rent by the room for a premium on the top rooms, and rent by the room on the bottom rooms or rent out the whole bottom unit to a family. That way you have multiple options while still achieving your goals.
Here are the inputs:
Purchase Price: $400-450K per property
Downpayment + Closing Costs: $90-100K per property
Mortgage Payment: $2,000 - $2,200/month assuming $2K/year taxes and $1.5K/year insurance
Total Monthly Rental Income renting out all the rooms (6 bedrooms x $700 rent per room on avg): $4,200
Total Monthly Rental Income renting out all the top rooms (3 x 700) and renting the bottom unit to a family ($1,700): $3,800
Total Net Rental Income Before Utilities/Maintenance/Reserves/Capex: Low: $1,600, High: $2,000
Utilities: ~$400 assuming that you pay for everything, internet, heat, electric, gas, water, storm drainage
Maintenance/Reserves/Capex: $400 to have enough to cover any items that could need repair, maintenance, etc and accounting for age of house and more wear and tear
Total Net Cash Flow Per Month: Low: $800/month High: $1,200/month, Middle: $1,000/month
Also, I didn't include you adding any extra rental income for for adding utilities to rent/garage spots rent/etc, so these cash flow numbers are very conservative but realistic.
By self-managing these properties, you will receive $3K/month in cash flow which would be that much closer to your goal!
With a property manager, you are looking at $2.3K/month in cash flow.
Either way, you will be much closer to your goal, and if you combine it with house hacking a couple of times, you and your wife will hit your FI $5K goal much sooner, probably in 2-3 years!