On top of that, you can also focus on historical tax credits even further putting you into the black.Flips, on the other hand, generate earned income subject to SE tax.

Personally, I hate the idea of a balloon payment at the end of the 5 years and subject to the whims and fantasies of the economy and banking industry.

This is telling you the buyer is paying too much for the property but the market is hot in the area the property is located.  

The sellers are stuck.Solution:  buy subject too the debt.  

Unlike passive rental income, the income from an active trade or business is subject to self employment tax (a nasty 15% tax commonly referred to a “social security and medicare” by working folks).

There are some guys here on BP that have information on all the subjects that you are asking about and special areas here on BP that talk about what you are asking, check out the education links.  

I'm thinking subject to could be an option when the agent gets back in town and is ready to finally move things along.

They can take the "additional income" from the rental into consideration but at the same time they also understand that it is subject to sitting empty in between leases.

Our market is so hot right now it seems hard to find any properties.

In your scenario - is it the condition of the subject that is preventing financing, or is it the renter/owner ratio?