Rentals also build equity through tenant payments and appreciation, with profits taxed at lower long-term capital gains rates when sold.

Tenants in lower Classes will have lower credit scores, which means higher chance of defaulting on their lease payments.

They have decent rental markets, and there are options where you could get in with a 20% down payment.

Best practice is to keep one or two payments in reserve from the buyers down payment for such instances.

@Jordyn Ohsnot enough info to helpbut if you're using a HELOC for the down payment AND getting a loan, then you're probably negative cash flow given that's 100% leveragei would never do that unless i were going to refinance in the short term

My guess solely looking at your numbers is that it's an older/distressed property which means you have to account for more costs in capex. 2nd thought being it's not in the best of neighborhood then you'd have to take into consideration lower quality tenants/ neighbors and maybe increase expected vacancy and late payments.

If it doesn't, can you still make the payments?  

Several have mentioned utilizing low down payment second home loans for qualifying.

The appraisal district shortly thereafter corrected the tax allotment “anomaly” between the two lots, but the investor never made a tax payment and eventually lost the lot to a tax foreclosure.  

I have been digesting all things Real Estate so right now I am working to lower my DTI while saving at least 6-7% for the Owner Occupant down payment (to include closing cost, etc.).