Low income properties in questionable areas is more for local operators or investors with very deep pockets that are taking a few percent of net worth and rolling the dice with 5% of their investment portfolio.

Turns out I may be able to roll that into the overall handyman costs so that added another 45 dollars back to my net CF.

We are looking to purchase our first investment property to get the ball rolling and are leaning towards 2-4 unit Multi out of state as we are in Ca. 

Wayne will probably roll in this thread.You're asking the right questions!

Things have been rolling along well now I am going to have to sit a while and build cash back up.

He couldn't provide me the rent roll but saying the customers pay cash to the owner, which I think it's a bit suspicious even though he claimed the cap rate with the Excel spreadsheet saying it's over 11%.

You could obviously use the HELOC, or borrow the down from your 401k, you could save cash for a down payment and get standalone financing for the new buy, or any number of things.There's plenty of SFR near you that would cost less then 165k, and I'd be tempted to use just as much equity as I needed to put a down on the first one and get it rolling before repeating the process.I wondered if you'd ever heard of the Infinite Banking Concept?

It also would have less of a swing when the market rolls up and down (I see you are in Southern Cal).

Found a 4-plex in residential area (population <3,000) about 45 minutes away.Purchase Price: $92,000 (MLS) Bank Appraisal: $99,000 (appraised "sale" value)Mortgage: 20% Down, 5/15 ARM (self-employed, first mortgage)Rent Roll: Full occupancy = $2,050/mo; currently = $1,630/mo (3 units with long-term tenants, studio unit vacant)Roof: No leaks but needs shingles in 1-3 yearsHVAC: One gas boiler, hydronic/radiant heat and hot water; no ACOther: 2500 square feet. 

I would say 5% is the power of cash in your 100K/ 20% down example (assuming you have good credit)All cash could probably take that deal down for 95K all cash quick close.I think that is how the seller would view it as they would give up 5K for a lower net price but a slam dunk all cash offer.At 90K all cash they would probably take your 100K offer with financing as they'd roll the dice on your loan being approved.