That is ripping someone off.

I do single family "off market" that I take over with owner financing, subject to, wraps and lease options.

Borrowing against your paid off house without an income puts way too much pressure on the success of whatever deal/project you decide to pursue. 

Sounds like there were some lean years but your persistence has paid off big time in terms of appreciation on both rents and home value.

Because after purchasing the new rental for $700K that leaves them $300K initially, so take $260K to pay off their mortgage, and still enough left to cover a good chunk of the taxes owed. 

If indeed it is stated that the second lien foreclosure is subject to the first, then no, the first will NOT be paid off. 

I’d like to start off by house hacking a multi-family unit. 

I was more focused on building the portfolio, and it paid off, as I scaled to 50+ rental units in 5 years.I started my own PM when I moved to a different market because I wasn't confident I could find one as good as my previous manager.

I am considering selling units off as they come available as co-op's.

Your response may turn off a number of guests who were thinking of booking.We've all had guests whose unrealistic expectations were not met and could never have been met.