If they are able to sell to a home owner, its usually the home owner who can barely qualify for an FHA mortgage, turns over extensive repair addendums because they recognize they don't have the means to handle home repairs on their own and must have the home 100% move in ready. 

@Abigail Irvine so you don't show enough income to qualify for an owner-occupied mortgage, so that leaves DSR loans on rentals as your only option.At the minimum 20% down required on DSR loans, your $20k barely gets you to a $100k purchase. 

Additionally, there is other rules like residency rules that may exclude you from participating in ACT 60. 

Under the IRS rules, a person  qualifies as a real estate professional if: (1) more than one-half of the personal services the taxpayer performs in trades or businesses during the tax year are in real property trades or businesses in which the taxpayer materially participates, AND.....(2) hours spent providing personal services in real property trades or businesses in which the taxpayer materially participates total more than 750 during the tax year.Like @Greg Scott and @Russell Brazil mentioned above, I don't believe that you would qualify as a REPS, but if you are going to try it, make sure you document it very well (i.e. with some kind of proof, like time cards, mileage forms, and/or receipts, etc.) so that just in case you do get audited, you at least have something to provide to the IRS agent. 

In the span of a couple years properties that were selling for $120-150 a unit are now selling for $150-200+ while rents are capped out and even then A.) won't math out and B.) are too expensive for most to afford anyways.i spend a good deal of time underwriting properties to show clients and routinely i'm looking for deals that have been on market for a couple months or longer so i can chop the purchase price by $200k and somehow get the numbers to work.

You eliminate the STR loophole which allows adjusted material participation qualifications

Hope your "far away from other rental" units are close to some commercial.City or County housing authority keeps participating landlords on file and are usually happy to refer folks.

Here’s why it might be a smart move:Maximize ROI: With leverage, you can control a larger asset value with a smaller initial investment, potentially increasing your returns as the property appreciates.Preserve Liquidity: Keep your cash available for other investments or emergencies while still participating in lucrative real estate opportunities.Tax Benefits: Deductible mortgage interest and expenses can lower your taxable income, enhancing profitability compared to an all-cash purchase.If you have the means to buy with cash initially, you can later refinance to unlock equity for further investments or improvements.

The monthly payment isn't going to get bigger, all kinds of crazy taxes to get out of the real estate eroding the payments you do receive every year and no opportunity to participate in appreciation. 

The people with balloon payments with 5% equity on an asset that barely appreciated.