With any investment there are risks, but how much control you have to mitigate risk is what makes the income snowball a low risk strategy.

I haven't filed a claim all these years but insurance is for the what-if and to be used for the high-ticker items, but chances of damages exceeding the 5% is low.  

If you tell them their credit score is too low (or some other reason) and somehow you obtained information that is inaccurate, then there is the potential to cause a legal problem. 

Once refinanced the property will be stabilized but still may see slow/low distributions because of cap rates and interest rates.

I would search for a property that has a low interest rate Fha or VA loan.

Low probability but high risk.

The only caveat with that loan is that you'll need to purchase in a low to moderate-income tract. 

If you purchase with 20k you will be paying PMI and the returns are too low. 

Positive cash flow and low interest, i assume, long term loan is an enviable position that with time will produce larger cash flow.  

Because so much real estate in the US or Canada wouldn't be profitable without ultra low interest rate (as many investors are discovering lately), we are obsessed with getting cheap financing.