If you are in a state where eviction cost is high and it is tenant friendly you may need a higher credit score to offset default risk and eviction cost.If you are in a landlord friendly state where it is easier to get non paying tenants out you may be able to handle more none payment risk.  

-When a tenant moved out, the management company refunded their security deposit but failed to account for damage, such as holes in walls and outlets ripped off the walls, leaving me with repair bills and also tenants moving in without the repairs being done.Stuff like this that is consistent and when I ask questions they are defensive, when I ask for more quotes for high ticket items they are defensive. 

My plan is to use a low down payment conventional loan, and with the factors you mentioned, it’ll likely be tough to find a property that breaks even.

I feel like having such a low payment and rate make it stupid to choose selling the house, but since I haven't been in this position before, I thought I'd ask here.

Quote from @Kevin Sobilo:Monthly Rent + Monthly Debt Payments <= Gross MONTHLY Rent * 45% Obviously I made a typo.

Focus on cashflow and growth, earning money for more down payments on more properties.

It's not an effective strategy but a lot of investors believe throwing in high end appliances in itself secures a buyer. 

Im looking to secure financing for my real estate business.

I guess that's part of my question, if you could have the security deposit cover that and people's experiences so I could better prepare myself. 

You can build your own team i.e. title co, insurance, pm, contractors, handyman,process server, lender etc.... or you can find an operator who can get you going in that market while simultaneously building out your team.Section 8 housing is a great way to ensure consistency with rent payments however not all tenant who have HCV pay 0%.