At first I figured why not do section 8 houses but I don't think he would want to put in 20k in a SFH and only cash flow $500 which would be $250 each every month.

With a long term rental, you cannot do that unless you qualify as a Real Estate Professional, which is a much higher bar.You will still get normal depreciation every year, which helps, but it will not turn a negative-cash-flow property into a tax win.

Start running numbers on real listings and watch local rents so you get a feel for true cash flow.

Think of it like running a mini-dorm or co-living setup, higher cash flow, higher touch.Here’s what you should expect:1.

Also with your current rent by room arrangement, it could cash flow well and continue to build equity without having to pay those selling expenses.Good luck!

Basic answer, but to increase cash flow you have to increase income or reduce expenses. 

Quote from @Yoni Meth: Hey All,I’m currently investing in Columbus, OH, and generally happy with the market, but I’m looking to expand into another area where single-family home prices are more in the $100–$150K range.My criteria:Strong cash-flow potential (ideally close to the 1% rule).Reasonable appreciation upside.Population growth and a diverse job market.Normal/Reasonable property tax rates (nothing extremely high that kills cash flow)Neighborhoods with acceptable crime levels, preferably C and above, avoiding high-risk “D” areasIf anyone has experience in markets that fit this profile, or recommendations for cities/markets worth exploring, I’d appreciate your insights.Thanks!

As long as the numbers still cash flow after the refi, it’s the cleanest path to scale.3.

They have to cash flow.  

Currently, that house is rented as two doors and cash flows $800 a month.