With a mortgage payment you'll be able to itemize your personal deductions instead of taking the standard deduction, because your mortgage interest + DC income tax + property tax + PMI are all tax-deductible and will be greater than the standard deduction for a single person (maybe not in 2021 if you buy now, but definitely in 2022).

@Jaocb Kelly in theory yes, however the lender will probably only look at 70-80% of the rental income and they may want to see some cash reserves to carry that rental should you need to make repairs.

Or expenses leaving out key items like water and sewer.

On second home loans you only have to put 10% down, I would just do that if I were you, sounds likes a great opportunity (also you maybe surprised  doing seller carry on 20% is not nearly as difficult for the seller)

Having lived there for 2/5 years, you're in a good spot to carry out your strategy.

I may explore a few more options as well to minimize my carrying costs.Thanks!

@Supada L. one more thing that no else mentioned was the itemized deduction you’d make for this mid-range, but still expensive, expense.

I spoke to my local CPA and he said technically, I should file my passive carry-over losses in every state.

I just keep them separate, carry lots of liability ins. and I don't give it a second thought.

The Seller carried 90% of the purchase price, and we privately funded the remaining 10%.