Hard to produce cash flow or break even with that much debt, at that rate.House-hackers, however enjoy certain one time (non-scalable) advantages that should be taken advantage of in the early days: - They can assume pre-existing debt like VA and FHA Loans (rather than take it on Subject-To which is dramatically riskier).- They can rent by the room and self-manage to produce day 1 cash flow.- Many of these HCOL areas also have strict limitations on AirBnB or short-term rentals... that do not apply to owner-occupants - thus allowing for extreme cashflow potential for house-hackers.

On the other hand, if you're aiming for long-term rental properties, getting prequalified with a lender specializing in traditional loans or DSCR (Debt Service Coverage Ratio) loans is key.

Eliminate debt, establish a budget, and save.

If your debt to income ratio is good, you can control a $700-800k asset with $50k.

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. 

The requirement to do this generally involves an experienced GC signing on the borrowing entity as a 20+% owner thus making them a signatory on the loan and responsible for the debt which in most cases is not very easy to find.

Usually its because there is a lot of debt risk. when interest rates went up a year or so ago I lost over 300k in sydication projects I was a part of because I didn't understand this concept.

As I studied earlier, the first thing you should do is marketing, then get a call and do a property analysis to understand if it's profitable for you, then meet with the seller and sign all the necessary papers, then if there is a debt in the bank we do a reinstatement quote, then do a title search to check if there are any hidden debts, if everything is fine we look for an investor or flipper and sign an assignment of contract with him and wait for closing to get our money.

As a side note, FDIC insurance protects depositor money, not debt.

Many of the investors I know have dialed back on their private equity investment or have changed to doing debt instead of equity so it was not prime time.