With that being said, occupancy fraud is one of the most common sources of mortgage fraud so underwriters tend to ask questions when something doesn't smell right. 

In all 3 scenarios, your ROI is almost infinite because you don't have any of your cash invested in the rental property AND you have between 20 and 25% equity in the property in case something happens to you financially later and you need to sell. 

That's going to be common in all the big metros. 

Just to work off the premium takes 4 to 5 years of perfect rental scenario."

@Tim Emery based on the purpose of the post, looks like @Travis Sperr hit the nail on the head.In this scenario, since 20% interest and 4 points "works", is the only option for a solid deal, and 10% down is less than $100k, you're making a better return on your money than if you were to put $200k in and $100k.

I have done almost this exact scenario: living rent free with mom, living rent free with spouse, living rent free with sibling.

It’s water for the building, and common area gas and electricity.  

Sure, in similar scenarios, it (going back to the original offer and going under contract) happens all the time - if the buyer still wants to move forward.

Federal Fair Housing Act says: In buildings with four or more dwelling units and at least one elevator, all dwelling units and all public and common use areas are subject to the Act’s design and construction requirements.

Kevin,Are you looking for short-term financing for a fix and flip scenario or are you looking for the long-term loan as part of the BRRRR strategy?