You've got to be patient in this game.

All this said, if we are patient to find the right house, we should be able find 20% for the down payment.

Its is always great to save on taxes, but you need to balance that tax deferment with you ability to patiently seek out quality deals. 

Beware the fury of a patient man." -- John Dryden

Quality of MaintenanceThis one ties in importantly to item 1.In depth, first, the quality of maintenance and second, the finishes need to be commensurate with the rent charged (or even slightly better) to make someone feel they are getting good value for their money.First, obviously, your property needs to meet all minimum safety and habitability guidelines—That is a deeper item for a different time, but ultimately, if you are a “slum lord” and tenants do not have access to the bare minimum requirements for peaceful enjoyment of their home, they will be quick to leave.Assuming that “bare minimum” box is checked, you can turn your attention to quality of finishes and general maintenance.First and foremost, the finishes should be commensurate with the price you are asking for rent.Now, the neighborhood and local comparable are hugely important in the decision making here.Is your home in a low income area?

The only advice I'd give now is be patient, you can afford it.

This is very exciting, as I remember you posted three years ago that you were looking for just such a property.Obviously you've put a lot of thought into this and were very patient.

Advantage of HML is another set of experienced eyes looking at the deal before funding it and the HML controling the draws for the contractors which both add safety for you.

Boulder does not need your increased tax dollars, they don't want any change to their city, and they drag their feet forever to not only give permission but also to approve anything.If you do not have 1,000 years to patiently wait for a permit to be approved (almost a sure bet you miss something on the original and it gets denied at least once) then do not buy in Boulder.Come to Longmont, where it will take you 20-30 minutes to get to Boulder, but our permit office WANTS you to improve the city, and our inspectors want you to pass - as long as you are following the building code. 

I wasn't really interested in buying this house, but my brother and sister couldn't afford any type of utilities or repairs, so it was our safety from footing all bills until the house sold.