Bob is right that you can get better cash flow on the east side, but I still see deals pop up over there from time to time and I don't see any rapid depreciation in those neighborhoods coming any time soon and I think if your strategy is to buy and hold in nicer areas with less risk, it's a very good area to target.

I have evaluated it to be able to cash flow as a STR with the lender special rate, even with a conservative 48% occupancy. 

Especially if you would pay the 2-3 points up front.

. $425k) to purchase a 12-unit Apartment ($1.5M) with 25% down ($375k from the HELOC).The remaining $50k from the HELOC could go into fixing/rehab of the 12-units.Then cash-refinance the larger amount from the 12-units to pay off the HELOC in one lump-sum (as much as possible), then using the cash flow from the apartment to pay off the rest of the HELOC.Repeat the process with a new apartment.1) Does this make sense? 

Purchase price: $120,000 Cash invested: $120,000 Sale price: $349,000 Nice mid century bungalow conversion to 4 bedroom 2 bath

The key is finding quality notes that are held by folks that are motivated to sell because they need cash.

Purchase price: $240,000 Cash invested: $180,000 Sale price: $789,000 3 Story Victorian build in 1900

If people want to live off cash, that's fine.

And that's not even touching on getting you into positive cash flow territory and the passive income you mentioned that you'd be looking for. 

But you can not take out any “cash” and you must buy at least as much.