I agree with Account Closed - it really depends whether or not this is going to be a pure investment or a "house-hack"

While this is a very personal decision with a lot of additional factors to consider, from a purely financial point of view, Option 2 sounds far better to me. 

I even looked at 6 months of pure vacancies..where would that leave me.

From a purely cash flow perspective, paying off your primary makes sense, but it's not that simple.I would look at your mortgage's interest rate. 

But I agree with you , when you hit a gentrifying neighborhood, you will make multiples of what someone trying to play a pure class /D neighborhood for 2% will make.

A rental property is an investment, pure and simple.

With that CoC return you might as well put your money in a CD if looking purely at the rental income.

What someone doesn’t get in appreciation, they get in pure savings which equals money in their pocket.Just my .02.Thanks for the topic.

Know your numbers, how much income do you need monthly and what percentage of increase is that in your current passive income.I would say if you’re a passive investor, you shouldn’t be spending more than a few hours a week being a passive investor.Real estate investing doesn’t have to be a part-time job, or something purely passive either.

I thought about acquiring a few rentals first with cash so that I could use those rents as income to help get financing.If anyone has any suggestions, please let me know.I am aware of hard money yet it’s difficult to get good lenders/rates for buy and hold properties. non qualified mortgage (non QM) programs can lend to you up to 80% LTV based purely on cashflow no tax returns nor income verificaiton because its based solely on the rental income schedule.