Can you afford to pay the extra 1% if you don't put 20% down? 

I would make sure whatever you buy you can afford to hold it without renting it out if you plan to use it.

I was thinking if she can’t afford to pay for it that I can take it out from her security deposit.

If you can afford to do 20% down I say go for it, even for a personal residence.

Given that other cities in LA are far more expensive, the area you are looking into seems affordable and central which lead it also being desirable.

I would say it can work out well as long as you can afford to pay the mortgage/expenses if it is not occupied.

I did a Phase 1 on my apartments even though it wasn't required by the lender for the exact reason you said - the protection it affords; figured I would throw it out there since this is undeveloped land and get feedback on whether it makes sense or not.  

@Jeffrey Daniels By reasonable I mean something I could probably afford, i.e.

I live in So Cal and can't afford anything reasonable so  I'm looking to invest in Vegas.Here's my question:I've been looking at condos and townhomes in the 150-200K price range.Should I use the SBA 64K as a down on a SFH as a rental property and finance the rest? 

If your market is too expensive dont be afraid to drive a few hours to a markert more affordable for your investment property.