It is also worth noting that property management is often closer to 30% of gross rent for a short-term rental due to the much more intensive hands-on management compared to a typical 10% for long-term and as such, I agree with recommendations above that medium term rentals may provide the best of both worlds if you are able to tailor proximity to a local need, e.g. hospitals and travel nurses.Again, happy to relay my personal experiences in the area if you're interested.Best of luck,Patrick

It’s a business account and I just checked, paying 3.95%, more than my personal one!

I have not done it personally but have some insight, maybe my reply may boost your post to someone with more experience in it. 

I think this is a calculation a lot of homeowners are making right now--especially if they have a low interest mortgage, equity, and their house will cashflow as a rental.The choice is a personal one of course, but I think your future self will thank you if you pull out some equity from your existing home with a HELOC for the downpayment on the next house and a cushion renting your current home, use a property manager as you have other things to do, and buy the next house and do the same thing again.

This means, on average, that this person is facing foreclosure or bankruptcy, and has no other reasonable options.

Yes, in theory a person can make CRAZY $$$$, and some absolutely do. 

It separates your personal assets from your business, providing a safeguard if any legal issues arise related to tenants or the property.

If I understand correctly; the seller would receive 80% ($40,000) directly from the mortgagee at closing and would enter into a personal agreement with me for the 20% down payment ($10,000) in which he would be reimbursed separately from my mortgage payments at a separately agreed upon rate and term?

I've personally driven this neighborhood and was amazed at how nice and clean it is.

I would recommend anyone lending in this environment to fix and flippers or any type of investment to be careful and get a personal guaranty and make sure person has a long track record.