To summarize the way I am reading it you are looking at the same pros and cons of FHA - Pro's low-low money out of pocket  -- Cons - mortgage insurance cutting into cash flow and often times these loans have strict appraisals who will not loan to a property that doesn't not meet their standards.  

But I think real estate is one of the investment vehicle that can let you make money both on cash flow and equity increase, then refinance it out to get the money back and capture equity gain, while still owning the property with great cash flow.To summarize the deal: I bought this house at $79,000 3 years ago with 20% down 5% interest + fee ($18000).

Hi Cesar, @Paul Khazansky nicely summarized it - you need to find a really good (undervalued) property deal, or bring significant cash of your own to the deal. 

In all fairness to you, this is an extreme example of what can go wrong and you have thus far lived to tell the tale.So, to summarize, you paid too much for the property based on the repairs needed and apparently didn't have the money to do the repairs and deal with the transition costs.What should you do at this point?

This summarizes everything that is totally wrong, and eventually fatal, about California real estate.

@Nhu Vu there are lots of things we would need to cover here and it might take a while to go over all of them but I'll try to summarize the important items.Renting High Value Properties - Renting a $500,000 property for $2400 per month is a terrible.  

But to really summarize you need to warm up your leads to you.

I’m going to try and pull all this information together and summarize.

So to summarize: keep studying, save money and get to know a LOT of people in the REI world.

To summarize, I guess I’m looking for help on the following questions: Should I be looking for a cash flowing investment at this point?