I'm not too familiar with the markets yet but research I've done suggests that the towns of New Britain, New Haven and Hartford all have a good mix of inventory and low prices coupled with plenty of amenities, night life, cafes, etc and local colleges to bring younger people to the area year after year.

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This vary heavily town to town. 20% down is great if buying strictly as investment but if you have a way of owner occupying I would explore that route and apply the 20% down to increasing value of property and instead using low money down loan. 

I guess my question is this: is the very low cash flow (due to my low down-payment and high interest) going to improve?

I appreciate the reminder as well that if the gain is fairly low then it may make more sense to just pay the capital gains taxes now versus 1031 exchange. 

Case in point, years ago we used Olympic paints from Lowes, which were carried for a long time.

Fully furnished 6 month (maybe as low as it was3-4 months) is much closer to a LTR.  

As a builder, I target about 15-20% profit per build ($500k-800k price range, low-mid in my area).

I have lumber liquidators, home Depot, Lowe's, and who knows what else near me (central CT).

The low purchase price, combined with an established market demand, made this an ideal transaction for a fast turnaround and profitable outcome.