I know YMMV and importance of team and all that, but what markets are smart investors consistently finding this kind of return without resorting to "one in a lifetime" type finds?

This is now an investment property, fomerlly your residence.List your rent received as ASSETS.Banks usually give 70 - 80 per cent of collected rent due to vacancy.You may want to get a higher cash flow by getting market rent plus a monthly option payment, say 30% more of rent.That would get you enough cash flow to offset the bank allowed rent vs PITI.That make sense?

Having foundation work done with a lifetime transferable warranty is an asset when selling a home in these parts.Rob

You'll probably have a few over your lifetime and you can work in RE in a full-time or part-time capacity over the years.Investigate which sides of the business are of interest.

Loan is FHA at 5 percent.

If successful, it would provide a better future for our daughter when it's time to go to college and provide us with a bigger return as opposed to our $$$ sitting in a bank account.It's been 2 years since we sold our previous homes so I'm thinking we would either need to go Conventional (not sure if we can do that for an investment property, despite having 20 percent...anyone know?)

Can we get Conventional financing 2 years post short sale if we have 20-25 percent to put down?

When you look at the property using the 50 percent rule: 975/2= 487.50 to cover our loan cost (and it ends up being 487.50-316.67 = $170.83/mo after putting aside 50% to cover insurance, taxes, cap exp's etc).

We've only seen one price crash in our lifetime and it was due to crazy financing.

Ten percent vacancy doesn't necessarily mean that you will always have exactly 10% vacant.