Tenant Default: 0-5% probability of eviction or early lease termination.Section 8: Class A rents are too high and won’t be approved.Vacancies: 5-10%, depending on market conditions.Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.Tenant Default: 5-10% probability of eviction or early lease termination.Vacancies: 10-15%, depending on market conditions.Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years.

My parents were able to pay off their loan balance with my payment to them. 

Instead:Buy in an LLC and use DSCR loans (which don’t affect personal DTI),Or do a hybrid strategy: some conventional, some DSCR, so you can balance cash flow, rates, and how much room you’re leaving in your personal debt profile.That approach gives you access to capital now and preserves your borrowing power as you scale.

Are the rates lower on Freddie small balance loans?

The most important thing is making sure both sides feel good about the balance of contributions and returns going into the deal.

The following numbers have been rounded to make math a little easier hopefully:Loan 1 (FHA) balance: $210,000Loan 2 (HELOC) balance: $50,000Property is conservatively worth $360,000Rent would conservatively bring $2100/monthMy question:Would it be possible to get a DSCR refinance loan to pay off the two existing loans?

I get a balance sheet and an income statement.

We don’t buy those.We have found what works and repeat it as much as funds allow.Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.If you/anyone is curious I'd be happy to share a picture of my portfolio.

That's all your balances are. 

Ask the seller if they’d consider a more balanced seller finance model or wrap mortgage.