Multiple SFH rental properties- financing question

[Teage Staunton]

I currently own one SFH that I rent. I lived in it before I rented it so financing was simple. I am now interested in buying a property solely for renting (already has a tenant); my problem is that I don't have a lot of cash to play with. My bank requires 20% down on rental purchases while only 3.5% on a primary residence. They are also requiring that I show finances to back 6 months of both mortgage payments in case they are vacant. My question is for people who own multiple properties- do you all pay the 20% down on each property you purchase with only rental intentions or is there something I'm missing? What are some other options instead of paying 20%? Very new to real estate so any information is greatly appreciated!!

[Teage Staunton]

Thanks Michael! I've been looking into creating financing but it all seems slightly out of reach for me. I would love to live in and then rent but I cannot afford to buy in my area (Austin, TX market is unreal) so I am buying in smaller towns where I do business already. Unfortunately I cannot live in the house as it is 8 hours away from my job. My sister currently owns the house I am about to purchase so she agreed to pay closing costs and a friend (realtor) is completing the paperwork for only a small fee, no commission. So, I'm saving money there I just don't have the funds for 20% down but want to continue buying. 

Oddly enough, a bank employee suggested that I lead the bank to believe that I will be living in it. I could pull this off but I don't see how that would work with insurance. I will need different home insurance for renting purposes than if I were living in it. Plus, misleading the bank that holds my mortgage doesn't seem like a good idea!

I was curious if it was normal for investors to put 20% down or not, seems like it is. Thanks again!