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.  

At lease renewal increase the rent $50 per month and then the same the following years until it is at market rate and more than likely the tenant will leave on their own and you will have still gotten the rent for that entire time until they moved out and built up your reserves for that property.

Make sure you have a reserve.

1.Is there an interest reserve and is it funded entirely by borrower at closing or is it capitalized into the loan? 

Once you go through the whole process, you'll know exactly how it works in your area for the future.If the sweet nature of the dogs is what's bothering you, and how unfair it is that pit bulls as a rule are treated with what could be seen as deliberate malice by the media, give some money to the Humane Society to do more to advocate for the Cause.

3. what type of deposit / reserves can you provide in case the monthly rents you receive do not cover the rent you pay me?

Most lenders do not service their own loans and reserve the right in the future to sell it- even credit unions and 99.9% of banks. 

Don't discount that.Real estate remains a valuable investment despite current challenges due to its tangible nature, long-term appreciation, and potential for consistent rental income.