In general, be conservative when you buy and keep in mind how the general economy might affect your strategy when it comes to financing terms.

How about if the economy stagnates, which it will, and rents decrease; will they cash flow then? 

I agree with that Tyler  but also it's bad for economies in long run  http://www.businessinsider.com/does-rent-control-w...It actually reduces the housing stock.They will be voting on increasing rent controls in a year in the state legislature, also on ellis act and are attempting to repeal prop 13 if we don't get active. prop 13 http://www.dailynews.com/opinion/20170407/in-pover...more on economics of rent control:http://www.seattletimes.com/opinion/there-is-never...

What's the economy like these days?

If, after you start getting some experience, it seems like your original reserve might not be enough for whatever reason (you have more houses and more chance of 2 things happening at once, drastic changes in the economy, etc.) then you can direct as much cash flow as possible into the reserve fund until it grows to an amount you deem sufficient.

Check out today's Memphis Daily News story about all the investment being made in Memphis - over $9 billion in commercial real estate development to support our local economy!

Chris, have you exhausted all traditional financing options?

With the low cap rates on MDU's and the risk of rising interest rates over the next couple of years is a recipe for bankruptcy.The benefit of a MDU is you do have economies of scale, but a much lower class of tenant.  

Add exhaust fans and vent them to the exterior either thru the roof or side wall. 

But what you're not getting is an economy of scale.