You have more options for loans in the 135k loan range, better terms and rates and you won't have that much more skin in the game. 

Since you will likely only be lent a percentage of the purchase, you will need skin in the game.

So in my mind don't chase the high yield unless you have really thick skin and want to really micro manage your portfolio and have the time and energy to do it.

As long as they are keeping a healthy reserve for maintenance, etc., then you should be receiving the net income. 

It seems economic down turn does not really hurt that much other than I'd assume:Hard to sell when people are strugglingRental income might drop as renters downsize but might also increase as people default on homesMore evictions as renters lose jobs and have pay dropsSo for holders like myself, economic down turn is not that big of risk assuming I:maintain healthy reserves for maintenanceGet cash flow that covers 90%+ of mortgage (If I take financial hit; I can cut back aggressively with a very low out of pocket cost of living)So I really need a 3 unit.

You will still need skin in the game.

It's probably like  the habitual chain smoker of 80 years is more healthy than the guy next to him who just smoked filter cigarettes for just a few years, and died from lung cancer.Do good, every time you can. 

Here we are, nearly four years later, and I'd also bet a number of those people are still waiting for the market to drop.Your caution is understandable and healthy.

Its highly unlikely for a lender to loan with the borrower not to have any skin in the game. 

Many ways to skin a cat and structure a deal.