Equity in a property is actually buying cash flow which is not the same thing as a property that is generating positive cash flow.Investors trick themselves into believing they have positive cash flow by throwing cash at a investment.

@Russell Brazil My initial intention was to occupy the space and make it my permanent residence, however my fathers health deteriorated shortly after I made the purchase, which is why I made the decision to stay with my parents and try and rent the apartment out, rather then sell and take a loss.

Plenty of wealth generation in flipping homes and much faster than buy and hold. 

The income the properties generate is insignificant.

My question is if my mortgage on the property is say 350 and it's renting for 550 won't I technically be negatively cash-flowing due to the probability that the 40% cushion initially factored into the deal will probably cause me to have to put a small amount of money in monthly?

Title company probably called and got the current water balance but the bill had not been generated as of closing.I agree you should review the numbers to confirm but I don't see what the problem is.

So even if it resets the maximum amount (which it might not go to the max) then over the course of the first 10 years you will have paid the same amount of money roughly than if you had the initially just gotten a 30 year that was 1% higher.

At closing they get their initial investment back from the closing attorney, and about 15 days later, after all of the final bills have come in, utility deposits back, etc., then the profit split is paid out.Usually they are feeling the process out during the first one they invest on. 

They would also get a large initial down payment.  

I'll spare you the details, but the houses generate enough rent in the first 12 months or less to cover the purchase price.