You can make a ton on them with Section 8 but it will require a good deal of management.

They require that you fax the deed, utility bills, etc. to them to prove that you are a landlord, but they don't require that an inspector come out to your house to see if the credit reports are in a locked room, like some other services do.

I don't have a ton of experience in this area, but I did just purchase a short sale property with owners still living there.

When we get a listing on an apt building, normally we call every owner + cash buyer in our specific area (this is a list that is EXTREMLY hard to find and requires a TON of research)... only after exhausting our resources do we place deals on loopnet.

As an experienced DIY'er, with at least SOME cash, you might well be able to utilize a hard money lender to get into that 70k property in a better area of town.

Longevity and utilization are important as mentioned above.

Mortgage+taxes+PMI is $2000 and Maintenance+utilities is $650.

More and more, I am coming across homes that have all their utilities off, how are you guys handling inspections during due diligence if the utilities are off?

Of course, having a rebuilt rental would give me a ton of value.

Many of these folks have used other companies and/or done a ton of research on this subject.