For the first few reservations, I would put a lot of focus on bringing in good 5-star reviews.

This purchase will be up ~1m over purchase price after this rehab is done (3 sources: 1) purchase below value (or value add from addressing the rent issues - depends on your perspective) 2) value add from 4 class b+ unit rehabs 3) natural appreciation).  

This influx of workers will naturally drive demand for housing, retail, and other services in the surrounding areas, especially in smaller towns and cities that haven't seen major growth in decades.

- property values soften (keep it realistic, US real estate has never lost value over any given 10 year period in history and you can't plan for a nuclear war..)To counter-balance these negative scenarios you have: cash reserves, credit lines, W2 income, maybe business income.

The cash you have on hand in liquid reserves allows you to focus on properties that "Are Not" turn key and could use a little TLC or renovation. 

If you decide to take this kind of route, it's still very important to go in with a secure plan and also have at least 6 months of reserves. 

I like new construction since there isn't any deferred maintenance and the properties should be relatively maintenance free for the first couple years (although it's good to include maintenance/repairs in your pro forma and maintain reserves just in case). 

However, that is the nature of rules of thumb.

But from what I've observed (and I'm sure you've seen too), only a few new investors, who are more analytical in nature, do this.One of the issues that I've seen again and again is new investors putting together a "spreadsheet" based on their limited understanding, that produces inaccurate or misleading numbers.

i agree that a new purchase at 75% equity will typically not have significant cash flow and may even be negative when properly allocating for all expenses.Investing to max equity without reserves is risky and you indicate would result in stress.