In my scenario, I found a bank (Navy Federal) that is willing do to a $40K mortgage but they only have a HELOC option and no cash-out refinance option.

If we don't incorporate, whose name should the property be in ( if we buy it individually and take advantage of the first time home buyer incentive in ontario we can put 5 percent down instead of 20 and keep cash reserves encase something happens to the property.) ?

@Kenneth Garrett when working with a HML is it true they require months of reserves?

Make sure you have adequate cash reserves and that you are buying deals that cash flow (carry themselves) including all your costs.

Personally I quit having reserves once I got to 5 properties and at 12 it would be too much money sitting around.

You will have a lot of "learning" (read money spent) once you own property, especially early on, so you want to make sure you have reserves available.If I could go back, my wife and chased the dream with a single family home when we were 25. 

I know the cash flow would change significantly if I put down 20% but I also want to leave some money for reserves.

None the less, if you reside in CA and invest in another state, you will pay your federal income taxes for any profits (for flips) or capital gains (for buy and holds over 1 year where intent was to buy and hold) and you will pay CA state income taxes as well.

On the previous loan I did, UW required 6% of global UPB in reserves in order to fund (when I had fewer properties it was 3mo PITI in reserves)... at that point refinancing my note holder out would require more capital than buying him out at the market value.  

It's the Federal Housing Finance Agency's House Price Index.