They financed 100% of that transaction, and I took on a huge loan - a huge risk for a broke guy like me.

You mentioned the risk of an unsuccessful flip.

The 2-3% points in extra cost are worth it if you plan on using as I described above because the use would be for a few  months at most and due to that short term use you can survive a rate adjustment up.But, if you have no plan to payoff the debt like when using for a down payment on a long term hold why pay the extra cost for flexibility and have the additional risk of the adjustable rate with the amortization looming when you can get a fixed rate second mortgage. 

And therein lies the risk of high-leverage.  

While I understand the risks associated with investing in areas unfamiliar to you, my budget forces me to do so.

An assistant can do most everything that you need done and they work directly for you rather than a property management company that has several clients and you’re just one of them.Also, again, depending on the location of your properties, have you considered doing a lease with the option to buy?  

Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?

I did the same thing several years ago, but for very different reasons. 

This isn't just high risk your talking about Zach, your talking about compounded high risk. 

We have several people living in these homes.