But that doesn't prevent you from getting creative and using strategies that don't require banks or out of pocket cash. 

If not, are there any other creative financing options we could look into in order to acquire both properties with 5% or less down on both?

Preparation is going to help you reduce some of the fear and anxiety.    

The actual cash flow increases at a rate that approximates the rent appreciation which in recent years has been great.Are you prepared to supplement initial negative cash flow to a time in the future when the RE has actual cash flow?

Situation: I live in California and I currently own a rental property in Indianapolis and preparing to get my second rental property.

You should speak with a lender ahead of time to know what your options are and what hoops you will have to jump through so that you can be prepared when you find the deal.

All preparation took months and months.

They won't do it and will move out at end of lease so be prepared.

So I live in the Saint Louis area, and I am looking for a Multi-family home (Duplex or Triplex) to buy in the Western, Southwestern, or Southern Suburbs of Saint Louis.  I'm looking to "house-hack" with this first pro...

You must prepare a form 3115 Change in Accounting Method in the current year to correct prior years and get the record set properly for going forward.The form is not for the faint of heart.