For example, my rentals are all C+/B-, so the rents are sub-$1000 - which leaves very little "skin" for a realtor, and frankly this quality of tenant will look themselves rather than involve a realtor.  

Let alone make a healthy monthly cash flow.

I am a brand new agent, have some experience in and around the industry, but I just have to throw this idea out before sharing with my clients.They have been approved for a healthy conventional loan, 3% down, but the house they want is at the top of their price range.

As long as you stick with the 3 C's of lending:1. collateral (make sure investors put real skin in the game) and the value of the property (make them provide an appraisal)2. capacity of the borrower to repay3. character of the borrowerI just turned down one of the $500 SUIT NO UNDERWEAR typesThey had about 7 judgements, unpaid property taxes, and two IRS liens.

Where are the cities across the country where investing in multifamily is still a healthy option in this rallying real estate climate? 

This doesn't take into account purchase expenses which can be substantial.If you paid asking price you would cash flow -1K per year.If you get the same property for 5MM you would cash flow about 6K per year.If you get the same property for 4.9MM you would cash flow about 13K per year.You would however have a million dollars (or close to it) paid down on the loan after 10 years.Now where can we find 30 year terms @  5% with no skin in the game?  

This so the investor has "skin in the game" and will be invested and will likely try much harder to make sure the project succeeds. 

@Sam Shueh Sam is right, some HML's require some skin in the game.

It should apply toward the security deposit, or not be refundable if they don't move in.We've never held a unit that long, I'd want a high amount collected to ensure they have skin in the game and aren't fully committed to moving in.

Have a healthy contingency budget.