I'm trying to think more creatively, like units I can get for cheaper because they're two beds, turn them into three maybe... units that are unlivable and need an upfront influx of cash to upgrade and get higher paying tenants in (though that cash counts against profits too).

I can always count on BP to come through with any questions I have!

@Brett Read, I think there's basically two ways of looking at it, one is "how good of a deal is it on its own" and "how good of a deal is it for me personally".Really, the first analysis is optional, but good if you think you might move out in a few years.The second is really the one that counts for you personally at the end of the day.If you're occupying one of three units, it's common to have low or negative cash flow - the "live for free while your tenants pay your mortgage" is a good goal to aspire to, but doesn't always work out when realities like vacancy, repairs, and capital improvements are figured in.I guess I would do the "conventional financing" analysis with the 20% down like you mentioned, just to get a sense of the cap rate, free cash flow and debt service coverage ratio to see whether you like the #s in general.But the most important analysis is the "real" one you're going to use to buy it, with the 3.5% down and you occupying the unit.

Regardless of how devoted to the asset class a lot of people make themselves out to be, if there is a sizable sustained correction, you can count on enthusiasm disappearing, so yes, there will be deals.  

Will this gift count as income, and will I have to pay taxes on it?

Anyone want to weigh in on if this counts? 

My advice is to not count on HELOC money until you have talked to a lender who you are sure will lend on the situations you are proposing.

I am thankful for the pointers definitely never thought of plasma, every dollar counts. 

You are going to be counting on that rental income.

We did go with FHA, but we found with the new rules that we had to go with a much smaller home, so wanted to point out (a few have already mentioned it but turned out to be the most important drawback in our case so wanted to emphasize it) that part of qualifying if you do not sell your primary residence these days is you would need to show enough income to cover BOTH house payments without the rental income counting towards your income.