Its just knowing which ones to use to get what you want and what the pro's and con's are between each product given the goals you're trying to accomplish.A lot of bankers and independents in socal broker to TCF like Chris mentions above.I've had good experience getting rental income to be used in similar context to the above mentioned.The formula is simple for rentals that dont yet show up on your tax return its 75% of gross income minus PITIA (principal/interest/taxes/insurance/assessments) to arrive at your net income figure that will either be added to your income column if its positive or a liability to be qualified for if its negative.In cases where you just want to do a cash out refinance loan you could use 1 year tax program with Freddie Mac to avoid having to average both your 2015 and 2014 which causes more paperwork and more things for an underwriter to sift through and demand verifications and documentation on.The nice part about using a 1 year tax program for self employment or realtor income (in your case) is that since there is only 1 year tax for your self employment we only need to use 1 year tax income on your rentals  as well which is a little known secret in the residential conventional lending world.This is great when you have a great 2015 or past return but your 2014 or 2 year ago return was not as good.

The issue is I live in an expensive area to start looking for this type of property that demands a high down payment.

Back in 2008-2009, I found that rental demand increased and asking rents softened slightly in Southern California.

It's not clear what the $20k demand really does to the whole picture without real details of numbers and balances, etc.  

Dealing with difficult tenants in exchange for a higher return is not gonna work for me as I have a demanding day job. 

I've been looking to invest in Dallas but the more I look into it the more I see a mini bubble of supply and demand.

However, I am extremely happy with everything that I have done and when I eventually move out the unit will demand rent at the top of the market.

There is plenty of demand here if there is reasonable quality.

I'm new to investing although I have updated and sold a few personal homes.I've lived in the Kc metro all my life and it seems like there is a pretty good demand for rentals.

I prefer 3/2's in good school districts because there is usually a lot of demand for them.2) Are there specific types of financing that are advantageous for people using this strategy?