This would raise our mortgage by ~ $700/month, which is a lot, but still makes our total mortgage payment well below rental on a 4bd, 2 bath.So, my question for the great minds of BP is, is this a good idea?

Know that every long term lender will require a survey and if something comes up on it when you are trying to sell or refi, you could get stuck in hard money without an easy or quick way to get out.Is there a pre-payment penalty?

What kind of account or vehicle would you suggest to start saving down payment money for my first rental property?

The maximum fixed-rate period seems to be seven years, and there is generally a balloon payment at 10 or 15 years.

@Duarte MarquesPossibly but highly not recommendedFor those with no real estate experience or experience in taking on debt, it’s not easyTo do it also with little to no down payment or reserves in most occasions will end in disasterReminds me of when in high school a friend used to let his dog drive his car.

And how much of a down payment do you have available to invest in the property?

Not the most scalable method, but I like the benefits it affords me while I am still a smaller operation.Completing 500 builds in just over 10 years is impressive for someone who just sorta fell into it.

.- There is no discount or created equity over and above the amount that is used as the down payment for the home.- The management company charges a management fee of 10% - 15% which can be a little higher than average property management companies, but that cost may be offset by higher quality of services.- The management company also charges for other services such as fee for coordinating maintenance and repairs, and turnover and releasing.

A $100-$200k down payment would get you a decent multifamily property, possibly with land depending on where you look. 

So you can scale that if you want.FHA is for people with poor credit and very little down payment.