This is why I get a high deposit from non-traditional tenants.  

So in this case I would have a traditional mortgage payment plus a payment to any private money investors involved.

They aren't like your traditional mortgages where rates will be around the same %...these could be widely diverse.  

Traditional "flooding" is not really a concern in the city of Chicago, as far as I know.  

I have a traditional loan on my house and have been renting it out for the past 5 yrs.

If you want a traditional mortgage you'll need a steady income and job.I'm a year out of school and should have two properties very soon.

As far as a Buy and Hold - depending on your credit you could leverage the same $30,000 to buy and hold a $125,000 property.This is the wild wild west right now with hedge funds and private equity lending like traditional banks did back in 2008.    

@Christian Brodin 

Traditional "American " approaches simply don't work.

I think this method will become more and more popular as more people continue jumping into real estate and add even more pressure to the saturated traditional marketing channels.