Purchase price: $85,000 Cash invested: $12,000 We bought our first Rental through an Online Auction.

This would allow you to use the tax and find an area with a greater growth and cash flow potential. 

So your payment will still be lower than any other loan amount. 

This significantly accelerates the depreciation schedule leading to larger deductions in the beginning years of the assets, reducing your taxable income and increasing your cash flow.

The biggest pain points like others mentioned is the Pre-Payment Penalty, Lender protections, and undisclosed fees. 

What kind of down payment options did you find along the way?

Regarding the other types of loans, based on your explanation the conventional loan seems to (on average) have a lower down payment but takes into account the normal loan factors whereas the debt service loan doesn't but with a slightly higher down payment, proof of income generation through the property, and never being able to live in it.

@Doug Smith  I like all the cash buyers, who are cash buyers as long as the property can be bought Sub2 or with 100% owner financing. 

Why do we care if our payments are the same anyway?

Obviously mortgage rates dropping is ideal and would allow for a portion of the $250k down payment to be pulled back out (cash out refi) all while keeping rents pretty close to constant.