I like this train of thought and think you should aim for option 3: conventional loan + lower downpayment (perhaps even lower than 10%).

I like the idea of using a 15-year loan for the best rate, especially since I’m aiming for long-term stability. 

One of my early properties barely broke even, but after a couple of years, rent hikes and expense optimization turned it into a strong performer.For cash flow benchmarks, I usually aim for $200-$300 per unit, but your situation.. house hacking.. offers unique benefits like reduced living expenses and quicker equity buildup.

I suggest using a service like Mayistay.

These modifications are carefully crafted to incorporate ADUs seamlessly, aiming for a delicate balance between increased urban density and sustained neighborhood character.

The lessons you learned the hard way in 2008 will be invaluable now, and it’s great that you’re aiming to stay small-scale and within your comfort zone of Sacramento, which gives you an advantage of knowledge in that market.Given your experience, I'd say start by focusing on three key areas to build confidence and minimize risks:Budget Control: Over-renovating was one of the big mistakes you mentioned.

It’s less than 15 minutes by car from two major universities (Towson & Morgan) and just a 7-minute walk from a shuttle that services both campuses.I plan to rent the property by the room, targeting mainly college students due to its proximity to the schools.

@Yael DoronIf you're working with a $150,000 budget and aiming for high ROI through rental income, consider nearby areas around Phoenix that still offer affordability and growth potential.

What I'm aiming for are turnkey rentals and trying to max out the amount of conventional, lower interest loans. again, the DTI income ratio will be IMPROVED if the property shows cash flow.

I aim for at least 4% to 5% as a benchmark.