Even in a lower priced investment property, like a small SFR, what does the investor without a contingency fund do when say the ac or a furnace need replacement?  

If it's already turnkey that means you're paying higher rates than necessary when you could put 20% down and get a DSCR loan with lower rates and fees. 

Contrary to most business lending, the REI industry has a lot of "non-bank" lenders that provide attractive loans that can lower your cost of capital and improve your profit/cash flow. 

You could bring less down and possibly have a lower interest rate since you will be living there.

As more people placed more properties in STR inventory, and as more municipalities taxed and regulated the industry, the profitability of the overall industry has reverted to a much more aligned (lower) risk adjusted return.  

Their ability to recover their money should you default is much lower in this position.

I've had smooth loans close with Kiavi and I've had rough ones, same with Roc.When Loans start to be troublesome:1) The borrowing entity docs are a mess2) The appraisal numbers are lower than expected3) Messy background reports4) Loans happening in an environment where market/rate fluctuating unpredictably 5) Your loan officer and their team are poor at their job6) Title issues that depend on county docs, that can be slow and painfulThere's more but it's Friday and I'm tired....

When they do, you can refinance to a lower rate.Dealing with current high interest rates (about 7% on 01/27/2025) you have the following choices:A larger down paymentAccept a negative cash flowBuy down the interest rateCombine and balance all three to get an acceptable cash flow today.

There is a ton of fix and flip going on in Brooklyn and I am trying to work my confidence towards that after my first project at a lower price point around 300K somewhere (CT seems like my only option). 

Don't go for the cheapest (unless the price is lower because it is on sale), but also don't go for the most expensive.