It would cost us $42,500 for downpayment and loan costs (+ home insurance/property taxes) upfront. 

I have a basic knowledge of real estate 2 home purchases/rahabs (NM & CA) and 1 sale in CA.

You can do less than 20% down (as low as 3.5-5%) if you intend to occupy the home for at least a year.2) There will be an HOA (homeowners association) which restricts rentals, so be sure to read the CC&Rs (governing documents) to ensure that your rental strategy is allowed, even if you intend to live there at first, eventually you'll be transitioning it to an investment property, so this will be important.

Some DSCR lender may jump on here and say they do them but I don't like their terms typically.

-------------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

So, make sure YOU understand the copy & paste info below:Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Is your home insurance going to be $1200/year or $6,000/year. 

But Scott is doing something other than what you do, which is seller financing owner occupied homes.

What is the detail of the home?

It could be owning multiple single-family homes, an apartment complex, or both.