When an investor is looking at being cash flow positive, they are typically putting down 20-25 percent or more.

State of Maryland discounts the recordation taxes for first time home buyers by a quarter percent. 1.875 points seems high to me unless you are buying down the rate. 

I have a lender that can do FHA 3.5 percent down, but has a lender assist for downpayment.

Going to offer $30,000 down with 8 percent on the remaining $174,000. 

It all depends on your goals -- immediate and mid to long term, and your situation.In our market -- Pinellas and the Tampa Bay metro, I don't see any corrections (price drops) in the near future, even if appreciation slows to a normal 4-ish percent, we will still be net growth. 

Anything over and above must be reported but no gift taxes due unless it exceeds the lifetime limit current around $11.8 million.

Fun fact; all these people preaching of impending housing collapse "just around the corner", not 1 of them has ever accurately forecasted such an event ever before, not once, in their entire lifetime.

We live in a high cost of living market (Portland, OR) and our tenants pay 70 percent of our mortgage payment. 

But yes I am willing to use 3.5 percent FHA (if the seller accepts that) or a low conventional down payment like 5%.

i would send a letter giving tenant at least 5 months notice there will be a 15 percent increase.