Realistically, if rents can't keep up with costs over the longer term, fewer people will buy rentals and there will be fewer options for those who can't afford to or choose not to own a home.

No the rates are not on par with conventional when you figure in additional costs and pre-payment penalties. 

In addition tenant flips take work and have costs.  

This would be 2 days before he announced in his June 20th email (which I believe you have) that he was suspending payments to hundreds of investors because of financial problems.He did not disclose anywhere in the webinar (48 hours before the email) the difficulties that his business was experiencing which was laid out in the email 2 days later.

Aside from COVID hurting our bookings in Mar through early June, business really picked back up this summer.

That will force them to offer you better terms if they want your business. 

I've seen a lot of conflicting advice that cautions to avoid areas with high crime rates due to complications and extra costs from the tenant base and property crime.I understand that both cities have shown crime rate improvements, but their overall rates are still way above average.What makes these cities attractive for investment despite this?

If you are comparing the same exact interest rates then 20% will cost 1.625 -1.75 points more than a 25% down payment. 

@Lily Rodriguez your profile says you're a real estate broker, if that's the case I'm shocked that you post on Zillow and not on the MLS for 2 reasons, one according to the association  rules you're required to list all your properties on the MLS (assuming you joined a association) second Zillow is not our friend, Zillow competes with us and tries to push clients to their Premier agents costing the listing agent half a month rent.Quote from @Lily Rodriguez: Marcus,If you want more exposure you can list it on the MLS, and you will have to pay a fee to the agent that brings you the tenant then you will have to do a credit check and background check yourself for each applicant however for my clients I prefer to list it on Zillow rentals only, because I can manage the applications directly from there and the prospective tenant only pays $35 application fee once and can apply for different properties with the same application fee.

We clean it ourselves as well to keep an eye on it and keep costs down.