Let me do a little clarifying. There are several problems with the plan.
Problem 1 is the return. Yes, this will be at least close to a 1% rule property (setting aside actually finding the property to buy). But the 1% rule, historically, is the *mininum* acceptable level to match or beat stock returns.
Why do you need to beat stock returns? Because of risk, and because of transaction costs.
First risk. A house is one thing in one location. You can insure against lots of things (fire, theft of contents, tree falling on the roof, hail damage, etc) but there is also lots of stuff (earthquake, flood, terrorism/military action, assets seized because tenants were making/selling drugs, etc) that you cannot (at least cheaply) buy insurance for. In those cases you might have the feds step in and bail you out, or you might not.
You also run risks that are social/economic. Your area might not be as up-and-coming as you think. Big employers might pull out. Climate change might render the area undesirable. Think Detroit suburbs.
$75k of index funds isn't very risky. It could go down some. But it isn't going to go to zero unless we're talking zombie apocalypse or asteroid impact or nuclear war. And at that point money is irrelevant. It's composed (at least in most cases) of a wide slice of the entire economy.
You want a return premium in exchange for the extra risk with RE, especially if you are just investing in a few properties in one location.
The next problem is transaction costs and time/effort.
I think it took me about 10 minutes to set up my account with Vanguard, and that was probably 20 years ago. I can buy or sell funds in a few minutes. Buying a rental property is a totally different story. It could take you weeks, months, or years of scanning listings and calling contacts every day. You'll need to inspect the property, inspect the neighborhood, and interview and hire managers/repair people/etc. And that's just to get *started*. It can easily take hundreds of hours of work even if you find a desirable property quickly! That's time you're not getting back in this life.
It also costs a LOT of money to buy and sell real estate. You'll pay closing costs up front when buying, and you'll pay closing costs and title insurance and commissions (at least in most cases) when selling. You can rage and tear your hair out and curse the Realtor (TM) lobby and their squid-like stranglehold on the market - but when all is said and done, you'll probably have to give them their money. Between buying and selling costs, you're probably talking close to 10% off the top on your returns.
This is why the 1% and (more importantly, IMO) the 50% rule exist. As methods to separate the (potential) wheat from the chaff when first considering properties. RE has a number of advantages (leverage, micro-markets where locals have an information advantage) but it also has huge disadvantages - especially for someone who anticipates having 4 kids to take care of.
Those disadvantages mean you need to be *crushing* stock market returns to make it worth doing. OP's plan will probably not do that, so it's not a good plan. Lots of people have a plan like it, because they came of age since 2007 or so and think that RE always goes up at double digit rates. If that party continues for 15 years, OP will indeed have killed it. But I wouldn't bet on that.
I own zero rental real estate now. Prices are too high everywhere in the US. I'll buy again (if I feel like bothering, I'm not at a point where I need to be chasing new investments) when the eventual reckoning comes.
-W