Each distressed homeowner is different, you need to be specific on how to handle them. 

I always run my STRs with LTR rents also, as my back up plan if cities change permits or cause me to switch to LTR Thank you for your response,There are some areas that still have new homes for low $300s I figure with a good down payment I can get a bit of cash flow, I know I won’t get rich overnight but when rates go down I can refinance and hopefully in the future I will be in the position to buy some distressed properties and repair them, maximizing future income. 

You can take some risk and get an easy 10% (buy a rental off the MLS)... or you can invest some time and inherit more risk (buy directly from sellers or distressed properties with unknown issues) and get even higher.What are you comfortable with?

But if you need $400k to buy a distressed property, how long would that take for you to get there?

We purchased a significantly distressed rental property in Austin October of 2023 and were hit with a huge (3x) property tax bill at the end of the year.

You can likely find a distressed property here in Houston in a good area with $80k-$100k out of pocket and fully funded by HML for the other % & rehab, then maybe keep some of the money in the house and have it more cash flow oriented or take all out and eat the little OTM play.

I'm in construction and I'm looking to invest what money I have into distressed properties in the southern towns and cities of Connecticut, and also maybe Hartford and waterbury as well, utilizing the BRRRR strategy.

I deal in distressed properties and I see deals sell in as little as 30 min to an hour on a daily basis. 

You might also be referring to a conventional loan that is for properties that aren't super distressed and most credit unions will be able to do them for you I would just make sure the property is owned in an LLC to protect you 

I specialize in buying distressed properties, rehabbing them, and then selling or renting them for positive cash flow.