Do yourself and your investors a favor--don't raise money from people and buy an apartment building right now. 

Cost to build is $350K (I am managing it all myself and calling in favors around the city to get low rates on materials and labor).

I guarantee you are more likely to secure favorable terms if the seller likes you and can imagine you as a great operator for the business.

This one came from Massachusetts, a state where the eviction laws are not in the landlord's favor.

Society and demographics favor smaller units since marriage and child bearing are being delayed.  

Negotiating favorable terms like a low interest rate or interest-only payments for the first few years could help manage cash flow until renovations are complete.

In our still relatively limited experience, seller financiers are usually looking to get a higher asking price in exchange for the favor of the private loan. 

Here's the problem: They are not a sustainable asset for most to own; they are difficult and costly assets to exit through a sale; if you achieve favorable refinances, you may be able to use those funds to buy other (hopefully better assets) but are now faced with operating highly leveraged bad assets. 

There are other areas that make good STR's that are overlooked by most in favor of the trendy areas. 

Avoid PMI and then go to a local credit union and get a heloc after closing to gift the money back.Have this as a tool in your tool belt but pursue use of the 3.5% FHA, knowing that you will be at a competitive disadvantage if you are competing with non FHA buyers, then you can call in the favor from your gift person.Just know that if someone gifts you down payment money, your bank will require them to sign a letter stating that it is in fact a gift that doesn’t need to be paid back.