Circa 2007-2009 our turnkey business model was " buy this home with zero down and we will put $10k cash back in your pocket " then it turned into $5,000 out of pocket to buy.  At the time it seemed that most of the people buying these types of homes were about 50% of people who were a hot water tank away from giving them back to the back.   Of the 20 rental homes I personally own, I did purchase them all using a hard money little to no money out of pocket method.  I like to think that most of my portfolio is a good mix of A-C homes.  

Regardless of purchase method, if the homes are in less desirable areas it doesnt matter how good a property management company is, they will have a hard time managing due to the low quality tenants that come with these areas.  This is where management companies get a bad reputation when a home is in a lower quality area, the problem is not management but the area and tenant. 

@William Hochstedler

Its not the same thing regarding the down payment/loan amount.  This type of strategy can pull higher comps but the home would most likely not sell for the appraised amount if that makes sense. When you buy with the little down method, where you end up with your refinanced loan amount would really be what the advertised price would be of you purchased the home already fixed up and renovated, then you would put down 20%-25%.