Specifically, must this be a commercial/business loan type where you have higher rates and shorter loan life or is there an alternative loan type? 

Hi @Nancy Cho happy to connect and talk business.

Im old school...my cpa is in the building next door and I like doing business face to face.

Cash flow approximately 350 a month.Option 2: Use the cash to buy land to build a 6 bed 4 bath duplex, all in cost approximately 300k/330k. 

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Let's say at 6% over 30Yrs will be about $960 per month(Principle/Interest) with the remaining  interest only portion $40K costing roughly $200 per month. $1500- $960 + $200 IS $340Cash in your pocket after everything roughly $1500-$1160-$340 which is not bad for a 100% financed deal(INFINITE RETURNS)Now, If you ran this analysis on a 1% deal as @Nicholas L. mentioned you will undoubtably end up in the red each month.All the best!!!

We almost went with a loan that we have to pay all the cost upfront and then get reimbursed on the back end and that was just not something we were willing to do.

Additionally you can do a cost segregation study and get a lot of depreciation benefits to offset the rental income (and potentially other income).  

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.

Maybe the owner of a plumbing business.