I personally own horses and it's an insurance nightmare most of the time - especially with renting out stalls to non-owners. 

Granted, that is for people that have perfect credit, putting down a large down payment, lower DTI, etc.

If a put a down payment on a home and begin renting it out, is it okay if the property just pays for itself and I don't make any positive cashflow?

Of course, I make sure my MTR passes the LTR test first, which is that LTR rates must AT LEAST break even the monthly payment or ideally, make $200 per door in profit.

@Eddie Smith we've found the two biggest tenant complaints:1) Maintenance expectations not met (taking too long)2) Expectations of communication not metThere are many more complaints, but majority are tenant-caused that they want a free pass on: waiver of Late Fees, Payment Plans to avoid eviction, being allowed to get a pet or otherwise violate their lease with no repercussions.

Also, the short term rental took all of my capital so down payments will be hard. 

I had to pivot to a more creative, non-traditional way to structure deals to keep my business going. 

Then I am late for my payment.

Is it better to do a smaller down payment compared to 20% to save on interest rates and then take a lump sum to recast the mortgage?

I have like $130k in equity on one of my duplexes and I would love to tap in the equity as a down payment along with DSCR loan.