The miniscule cash flow likely wont cover unforeseen expenses on cheaper properties, at least in my area.In all honesty, I would stop and look at your goals and figure out why a 200k property or a 40k down payment is scary to you.

@Michael BakerHi Michael,I have decided that a duplex is the best move.I have a max purchase price limit that I wont go above or I won’t have enough money to finish the process.There are duplexes available at or under my max number in my area.Basically I have budgeted to hold for 2 months while we renovate.10% down is what I am planning to put down.Then I have enough left for reserves, closing and all the other costs associated with closing the deal.It would have a low cash flow if I treated it strictly as a rental (at least at the beginning).I have some plans to increase the income on the property that will allow me to cash flow better within a year of buying it.

I have a portfolio of properties, which has obviously suffered this past year.

@Matthew Pham+rent                                                          1800-principal, interest, tax, insurance              -1600    (I assume tax and insurance are escrowed)(post refinance)-repairs(leaky toilet, garbage disposal, etc)  -180    (10% of rent)Capital expenses                                          -180    (10% of rent)    (you wont have to replace window, roof, HVACs now, but you will eventually)Vacancy (it will not be rented 100%)            -150    (for a single family home I budget one month a year vacancy or 1/12 of rent)Lawn Care, Property Management, etc...     

The Very strong odds are that your existing structure wont be able to support the weight of an additional 2 stories. 

I know they are cheaper but the expenses add up and you wont find a reliable pm. 

But my earned income is gone and on paper I'm afraid that wont work well for a lender.

You wont like what he says...........but he is an EXPERT.

For ski areas, you may experience a hotter winter than expected which means not only will it not snow, but the resorts wont be able to produce fake snow either.

But my earned income is gone and on paper I'm afraid that wont work well for a lender.