One thing I did note is my insurance is $3K a year lower due to the monitored fire suppression system in these larger properties versus my smaller properties that sleep 12 or less built close to the same time.As someone who has lived in Illinois twice, the politicians there don't care if people burn as long as they can tax and spend. 

As for a downward shift you can always lower your rate (underwrite a worst, middle and best case scenario), Make sure your rental stands out from the crowd (easy to do in Hawaii since most owners don't reinvest in their property).  

This sounds like a great strategy to me since this would substantially lower my down payment in a deal.

I believe it tends to give me a slightly lower return, because the sponsor is going to be more careful, and if there is a severe downturn will prevent me from taking catastrophic losses.

You may need to lower the rent you are asking for by a bit, but it is way better to have a tenant using less water because they're the ones paying for it, than having them run the water for hours since they aren't the ones paying for it.

Usually only commercial properties with established operational expenses histories are evaluated by cap rates and then those cap rates can also be applied to buildings in certain areas representing higher or lower risk areas.

Problem was it's a common perk for Chinese restaurants to provide lower paid staff with room and board, and without the upstairs apartment, renting an apartment in nearby towns for staff is a problem with rooming house regulations beside a major expense.

While 20% down improves cash flow by eliminating PMI, it delays entry into the market, potentially missing appreciation.

But depending on the magnitude that home price range would have to go lower. 

In my ideal scenario, I would do some more entry level projects to start off while I learn the ins and outs, but my goal would be to eventually work on more luxury flips - larger scaled projects in more desirable neighborhoods (though fewer and farther between).