Given that the property was worth $390K in its current condition, I saw an opportunity to make the numbers work while keeping my upfront costs low.Instead of increasing my cash offer, I negotiated a $25K down payment with the seller carrying the balance for two years through owner financing.

Also, how do you balance cost-effectiveness with providing a high-end feel?

@Darrius LloydTo start your house hacking journey, research neighborhoods with potential for multifamily properties and balance affordability with tenant quality.

More risk on my side, with entire investment at risk, but the upside balances the risk. 

Remaining balance is 1.2M payable for 4.5 years @ 8.5% interest, 20k minimum.

Make sure to keep backup documentation for each transaction if possible and transfer the balance when you return.

These area are offering a good balance between appreciation and decent cashflow. 

Maybe there is a balance of both?

There's obviously quite a bit of diligence that comes after such as who the key principles are and their credentials/track record (both balance sheet and experience), the underlying real estate and thesis behind the investment & tax prep and audit procedures but as a general rule of thumb if the investor can't get past the first part which is understanding what they are investing in, passive investing is probably not for that individual. 

In this case, since they are borrowing their payments, these would get added to the principal balance each month, and interest would be calculated on that.If, for example, the interest rate on the note were 10%, they would implicitly be borrowing their payments at that rate.