Basically, the investor buying a property from us needs to make a guaranteed 8% ROI for example, we pay them quarterly and if we can rent the home out where say we make 11% ROI then not only have we made the sale to the investor but also an additional 3% on top of managing the home.

IMO, as well, LOL, it's not a good idea to put investors in an arrangement that can be construed as a partnership.As additional collateral you can provide an assignment of rents, and insurance proceeds in the event of default (be careful here as insurance needs to go to the property, but if it is in default it could be used to reduce the amount owing).You can also simply assign any purchase agreement you do with a buyer to your investor....in the event of default.Investors (you) should keep a copy of the purchase agreement and place the original in a safe deposit box file.

Following that formula, unless my rents are double my expenses, my debt:income ratio goes up, and after the addition of five properties, may be into the 40s, making a 2nd home purchase difficult.Am I looking at the correctly?

For some reason, asset mgrs have a hard time altering the addendum.

For the Landlord Addition it's $15/month for up to 25 units or $30/month for up to 50.

Not to mention the additional accounting needed.

As for searching for a property to buy, you can add it to the cost of the property once you close and then depreciate over 27.5 years for residential real estate.

Inevitably, I will return with additional questions.

I can't tell if you are adding additional structure to increase the square footage or if you are getting that from the basement finsih out.

500,000 is not enough if your family depends on your income for support and you pass away prematurely. if you borrow from the policy you reduce the face amount and universal life does not have Paid up additions as indicated by a previous poster.