More equity means lower downpayment.  

. -- Thus, you can expect to get Class C or D tenants, which have a 15-25% probability of defaulting on their lease payments.2) If your PMC is lowering FICO to 550, what are they doing to improve their screening in other areas?

A HELOC offers flexibility and lower interest rates, which can be ideal if you’re looking for short-term financing with lower payments during construction.

I can do that through charging points, but since I'm getting it at a lower rate than you could as a consumer, I prefer to mark up the rate while still being lower than most others in the market.

They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.  

This was my first deal, and house hacking made the most sense because it lowered the threshold for risk in my mind.

DSCR or Fannie/Freddie loans can go up to 75% on single family homes, multi family homes (2-4 unit) max at 70% if you stick with Fannie/Freddie.Other things to consider would be:Paying points for a lower rate vs higher rate with no pointsIf going DSCR - Prepayment penalty term (0-5 years)The lower the loan size ($200-250k and lower), you should consider paying up to 2 points and doing a 5 year prepayment penalty if going DSCR.

The Heloc can also pose as a debt obstacle since its an open end mortgage a.k.a credit card.a mortgage is also set up over 30 years so it offers a lower rate and payment. 

Sherman does seem interesting though because of the lower cost and growth potential.  

There are some zip codes where you can indeed get above market rent with S8 (even after deducting utility allowance), but some where they are lower.