BUT this also leads to very high default rates.

This will be the 3rd rental property in my portfolio. with the interest rates being so high I feel Iike a higher down payment could be a good idea over the long run, but I’d like to hear some ides on this, thanks in advance !

You'll struggle with the debt service at that rate after expenses on a property that size. 

--HELOC is against PRIMARY---Rate is 6.95 first 12 months then prime +2 for a total of 10y, interest only, then amortized--Total HELOC would be purchase price + Renovations (approx 120-130 total but who knows)Projected cash flow is estimated without knowing specific extra costs.  

If everything else is the same and the only new change is buying a rental, I have a feeling that the return is done incorrectly.I am also surprised that a rental purchased recently with high purchase prices and high interest rates would generate positive taxable rental income.

These loans typically have competitive interest rates and terms, similar to a HELOC.

Many of my consulting clients complain that they get no hits and when they do get interest, the offers are far below the rate (like 50%).

The final document you will need is a Certificate of Occupancy or a Certified Inspection[11].Texas or taxes:The City of Austin's Hotel Occupancy Tax rate is 11 percent, comprised of a 9 percent occupancy tax and an additional 2 percent venue project tax.

These loans typically have lower interest rates than other types of financing which is still saying something currently given that you can get a 6.5-7% conventional loan vs. an 9.5-14% loan using a DSCR or HML.

That is primarily because the cost of money (interest rate) is twice what it was two years ago.I suggest that you adjust your thinking about buying a vacation rental just a bit.