Not great for cash flow, but if the townhome appreciates even 3% annually, that's ~$9,500/year in equity growth on top of principal paydown.For deal #2, I'd focus on finding something closer to the 0.8% rent-to-price ratio minimum to give yourself more cash flow cushion.

Don't forget the principal paydown and tax benefits—you might actually be breaking even on paper.

The Reality: A $1M home with 20% down at current 6–7% rates will have a PITI (Principal, Interest, Taxes, Insurance) that might exceed $6,500/month.The Test: Will that home rent for $8,000+ in your market?

And while you get better financing on 4 units then 6, remember the 25 year amortization on the 6 just pays principal down quickly increasing your equity and net worth.

I see a lot of investors obsess over cash flow and the P&L… and totally ignore the balance sheet.Here’s why that’s a problem:Your P&L tells you if you’re making money this month/this year.Your balance sheet tells you if you’re actually building wealth.You can show a profit and still be overleveraged.You can show a “loss” and still be increasing net worth (thanks to principal paydown, appreciation, and smart capital improvements).Serious investors understand both.

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

Planning to live in the property for 2 to 3 years while attacking principal to drop PMI and also hoping to recast loan to drop P&I.

---------------------------------------------------------------Historical payments schedule Payment Due Date Required Payment Total Payment(s) Principal Interest Fees Paid08/19/2025 $273.49 $0.00 $0.00 $0.00 $0.0007/19/2025 $248.49 $255.00 $162.04 $62.96 $30.0006/19/2025 $273.49 $280.00 $161.10 $63.90 $55.0005/19/2025 $273.49 $273.49 $153.69 $64.80 $55.0004/19/2025 $273.49 $273.49 $152.80 $65.69 $55.0003/19/2025 $248.49 $300.00 $203.12 $66.88 $30.0002/19/2025 $248.49 $375.00 $276.51 $68.49 $30.0001/19/2025 $248.49 $260.00 $160.57 $69.43 $30.0012/19/2024 $248.49 $260.00 $159.64 $70.36 $30.0011/19/2024 $248.49 $248.49 $147.27 $71.22 $30.0010/19/2024 $248.49 $248.49 $146.42 $72.07 $30.0009/19/2024 $248.49 $275.00 $171.93 $73.07 $30.0008/19/2024 $248.49 $248.49 $144.57 $73.92 $30.0007/19/2024 $248.49 $265.00 $160.15 $74.85 $30.0006/19/2024 $248.49 $255.00 $149.28 $75.72 $30.0005/19/2024 $273.49 $278.00 $146.42 $76.58 $55.0004/19/2024 $273.49 $273.49 $141.09 $77.40 $55.0003/19/2024 $248.49 $260.00 $151.72 $78.28 $30.0002/19/2024 $255.49 $270.00 $153.82 $79.18 $37.0001/19/2024 $248.49 $248.49 $138.50 $79.99 $30.0012/19/2023 $248.49 $248.49 $137.70 $80.79 $30.0011/19/2023 $248.49 $255.00 $143.37 $81.63 $30.0010/19/2023 $248.49 $265.00 $152.48 $82.52 $30.0009/19/2023 $248.49 $265.00 $151.60 $83.40 $30.0008/19/2023 $249.98 $265.00 $150.72 $84.28 $30.0007/19/2023 $276.49 $275.00 $131.95 $85.05 $58.0006/19/2023 $248.49 $270.00 $154.05 $85.95 $30.00 c1c768bf-29bf-4a81-83e7-54aa9d42d5a9Page 205/19/2023 $255.49 $285.55 $161.66 $86.89 $37.0004/19/2023 $248.49 $275.00 $157.19 $87.81 $30.0003/19/2023 $248.49 $255.00 $136.39 $88.61 $30.0002/19/2023 $248.49 $255.00 $135.60 $89.40 $30.0001/19/2023 $248.49 $248.49 $128.34 $90.15 $30.0012/19/2022 $248.49 $260.00 $139.04 $90.96 $30.0011/19/2022 $248.49 $265.00 $143.21 $91.79 $30.0010/19/2022 $248.49 $255.00 $132.44 $92.56 $30.0009/19/2022 $248.49 $250.00 $32.71 $187.29 $30.00 c1c768bf-29bf-4a81-83e7-54aa9d42d5a9Page 3Monthly Fees Transactional Fees Late Fees One Time Fees$25.00$12.75$14.00 $25.00$5.00 ACH Return Fee: $25.00$5.00 ACH Return Fee: $25.00$15.00$18.75$13.00$13.00$12.42$12.42$13.75$12.42$13.25$12.75$3.00 $0.00 ACH Return Fee: $25.00$13.67 $25.00$3.00$6.00 ACH Return Fee: $7.00$2.00$2.00$3.00$3.00$3.00$3.00$8.25 $0.00$2.70Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00ACH Return Fee 4: $7.00ACH Return Fee 3: $7.00ACH Return Fee: $7.00ACH Return Fee 2: $7.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00 c1c768bf-29bf-4a81-83e7-54aa9d42d5a9Page 4$5.66 $0.00 ACH Return Fee: $7.00$2.75$2.55$2.55$2.48$2.60$2.65$2.55$5.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00Monthly Servicing Fee: $20.00Property Taxes (prorated monthly): $10.00 c1c768bf-29bf-4a81-83e7-54aa9d42d5a9Page 5Starting Balance Ending Balance$10,631.87 $10,631.87$10,793.91 $10,631.87$10,955.01 $10,793.91$11,108.70 $10,955.01$11,261.50 $11,108.70$11,464.62 $11,261.50$11,741.13 $11,464.62$11,901.70 $11,741.13$12,061.34 $11,901.70$12,208.61 $12,061.34$12,355.03 $12,208.61$12,526.96 $12,355.03$12,671.53 $12,526.96$12,831.68 $12,671.53$12,980.96 $12,831.68$13,127.38 $12,980.96$13,268.47 $13,127.38$13,420.19 $13,268.47$13,574.01 $13,420.19$13,712.51 $13,574.01$13,850.21 $13,712.51$13,993.58 $13,850.21$14,146.06 $13,993.58$14,297.66 $14,146.06$14,448.38 $14,297.66$14,580.33 $14,448.38$14,734.38 $14,580.33 $14,896.04 $14,734.38$15,053.23 $14,896.04$15,189.62 $15,053.23$15,325.22 $15,189.62$15,453.56 $15,325.22$15,592.60 $15,453.56$15,735.81 $15,592.60$15,868.25 $15,735.81$15,900.96 $15,868.25---------------------------------------------------------------LAND CONTRACTParties.

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

Should we aggressively pay down the principal and refi?