Partner Driven provided 100% of the funding, covering the $160,000 purchase price.

And this is your best chance of house hacking while covering most of your living expense or maybe even cashflow if you buy in the right area.Hope this helps!

Or do they leverage debt, and use the subsidies to cover the equity needed?

The most important thing is to ensure your loan is covered in the event of a loss.  

But they still suffer from interest rates and market sentiment factors.

@Kevin Connauton, I agree with you that although Pad Split is a great choice for getting the rooms filled, they don't cover all your bases in terms of property management.

Let's say the AC or Heat goes out in 60 days, do you have funds to cover that?

As for the areas to target, my goal in getting our feet wet as real estate investors--and since we plan to be living in Sac--is to find a property we can live in while renting out one or more units to help cover our housing expenses, which we can then hold and continue to rent out when we move.

However, they approach financial health from different angles.The 50% Rule is a quick estimate that suggests operating expenses (excluding mortgage principal and interest) will roughly equal 50% of the property's gross income.The DSCR is a more precise calculation (Net Operating Income / Total Debt Service) that determines if a property generates enough income to cover its debt obligations.Deal example:- Class C middle class neighborhood- 4bd / 2ba single family house- ARV: 190k- Purchase: 105k- Rehab: 35k- Market rent: $1,400-1,525- Section 8: $1,475- Property manager: 10%- Taxes: 125 month- Insurance $1250 yr- HOA: $55 month- purchased and rehabbed with all cash.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.