You have to either buy cheaper houses that you can easily afford, or make sure that you have enough cash in the bank to cover any vacancies and large repairs.

But if you are looking at a larger than normal down payment or an all cash transaction, it is an area that you will be able to easily fill with quality tenants and have an asset that is likely to increase in value over time.

Personally I evaluate all STR as LTR, if they won't at least break even easily then I won't look at them. 

You can easily end up underwater in a year or two if the market tanks.

The surplus currently available at court  registry can easily cover delinquent property taxes.

You can easily double your money or better.  

I think this could easily be scaled.Step 1 - Build Your Buyer's ListI've assembled a list of Cash Buyers using Craigslist however I'm not very confident in the quality of my list.

I gave my $300,000 move-in ready beautiful vacant home to this large well known local co in Oct 2016.( Ive owned and self-managed another very similar rental in the same subdivision-- since 1998--and it has never had one day of vacancy in 16 years-- rented at $1860.)This professional pm co put all utilities in their name on my new property and turned the hot water heater ON and the Water ON ( even tho the main water cutoff valve is easily accessible in the coat closet beside the garage, the entire 3 months they 'managed it').They let the property sit VACANT OCT-NOVand on their "routine inspection on Dec 1, to make sure hobos had not moved in" they SAW the water heater in the garage was spewing (at full blast) A 20' stream/ fountain of HOT WATERand that the entire finished closed garage was covered COVERED !!

You can easily shell out 6-10k on repairs.  

. :) Jeff, I'm not sure it's possible to get houses 20% below market easily in Phoenix now.