My tenants in that area stay long term maybe 3years+ and normally have multiple pets.  

Remember if you are borrowing money for a DP the margins on the property need to be much higher than your normal investment property.

If you go this route I would treat this the same as utilities on top of normal rent. 

If I purchase a 5 unit commercial property with cash and I then take a home equity line of credit against it, are interest rates on that money normal HELC rates?

Of course do all of the normal due diligence as any other deal, inclusive of surrounding areas and what you can expect living there for a year minimum for FHA requirement.

Right now I normally do it since it's hard to find people to use the tool correctly, but honestly at some point I'll farm it out to a local leasing/marketing person as part of their R&R or find some dude in India to manage it. 

It'd be my 2nd home with this builder, and I've sent them referrals as well, so they're including a good amount of upgrades etc beyond their normal stuff, and it's a good deal relative to this crazy market.

The HELOC is debt.8% ROI wouldn't be enough for me in a "normal" deal, but might be worth considering if there was very little capital required.

Also keep in mind you will need WC/GL which will cost around 20K a year for minimal volume, you will be on the hook for warranty and callbacks as well as taking on all the liability that the GC would normally shoulder. 

There is a lot of research you should do and if you are going this route I would be very upfront with everyone that this process can take twice or three times the normal closing time.