You're also able to work with the utility company to install an additional meter.

In addition to the different tracks @Chris Seveney descrubed, there is also good information on creative financing and seller financing (including what to avoid).

Also there is an additional tax on the returns due to the financing. 

A quick google search reveals that Minneapolis provides assistance for first time home buyers so there seems to be a problem with funds for first time home buyers in your locale too.

The only reason he did it was because it led to additional work.

This is due to bonus depreciation which allows taxpayers to deduct 40% of qualifying property costs in the first year, in addition to regular depreciation for new construction and improvement.

@Edgar Duarte Selling now under the primary residence exclusion avoids capital gains taxes, allowing you to reinvest the $500K equity in diversified assets like index funds or additional rental properties.

In addition, if this was originally an owner occupied house, there are often homestead exemptions where the first  $XX,XXX. of the value of the home aren't taxed.  

Section 8 would tend to carry higher repair and as a result, additional vacancy.OP’s definition of cash flow is rent minus piti.  

So, if you put in 20K, you could set the bid up to the amount of the 100K total debt(80K existing + 20K additional) to ensure that the property reverts to you as the lender.