If the rate is reasonable then it may make sense to try to save fast to get to the 3.5% down payment on a double or triple - househacking may allow you to increase your savings rate and pay down that loan even faster.As for estimating costs, closing in NY factor at least 1% of the mortgage amount for tax, plus $1500-2000 for lawyer, title and fees, then the amount required by the bank for escrow will depend on the actual property taxes and insurance.

My understanding is the key is to keep separate bank accounts and financial transactions.

In most states all you need is a separate account in a bank in that state.

Think of it as a piggy bank: you put money in all the time, but the piggy itself also grows in size over time.

I have a clause in the lease that says the security deposit will be held in so and so bank with so and so address and interest rate will be xyz.

You calso never have to worry about "Money in the bank' versus a credit risk HELOC. 

What it appears matters most is who the issuing bank is. 

@Seth RolandLoans like bank statement loans or DSCR (Debt Service Coverage Ratio) loans could be great options.

We were able to refinance with our go to bank at a decent rate in this environment which allowed us to pull out our initial investment and renovation cost.

When you are on the commercial side of the bank, and borrowing on the bank's balance sheet, they have a lot more flexibility to how they handle loans.