Here’s the REALITYWhile I compliment you on your ambition and drive, lenders want the borrower to have their own cash in the deal, not borrowed money for down payment.  

I have about $250,000 in equity in the property and a cash flow of $1200 not including capx.

I have also looked into small apartments 4-10 units, but found they have an even harder time to cash flow with current rates.  

If real estate is just a side gig and finding deals is tough right now, it might make sense to hold onto cash and wait for a better buying opportunities.2.

It's a lot of cash investment in rehab and this will be my first investment only property.

In this market a lot of properties cannot work for cash-flow or a flip.

If so they can get a ground up financing and use that cash on the down payment, as ground up financing can finance some of purchase and most of construction costs (on a withdrawal basis)

He acquired a tenant for the SFR at $2,550 a month, bringing his cash flow to $850 a month.

Looks like Landlord wants to terminate the lease without costs to him, he gave me a check for the security deposit (with memo noted: lease cancellation) and keeps insisting that I cash itI didn't agree nor imply that I want to terminate the lease and I didn't cash the check

That example allows you to own 100% of the cash flow and the tax benefits.