Legal issues aside this would be a ridiculously difficult business to make any money in.

However, with this strategy, it seems with a higher mortgage rate from putting less down and the cost of PMI might make it very difficult to find a cash-flowing property. 

Here are some of the downside I can think of: 1) PMI costs, til 20% LTV2) over-leveraged with larger mortgage payment (more difficult to cash flow) 3) no refi until at least 20%3) other?

When you're competing with many other first time home owners and a shortage of product, it's extremely difficult to enter in.

I think that HELOC on investment may be very impossible, difficult, or expensive. 

Difficult to make decisions, and can become gridlocked. 2.

Good contractors are not difficult to find, they are difficult to hire in this economy.

You are correct in that that market is extremely hot right now and it can be difficult to find deals.

It is quite difficult if you will be doing it alone.

Purchase price: $58,000 Cash invested: $13,800 Sale price: $101,500 Bought this 4 unit in bad condition and without tenants.After fixing the place I brought good tenants that get help for paying rent - like county assistant.COVID19 made it difficult to handle tenants in that area but hard work paid off.I sold the property to take over a better dealI have attached some photos of how all units looked like after the fix-ups I did.