FHA loans typically require the property to be a primary residence for at least one year, so he should confirm compliance with his lender.Once rented, he can deduct expenses like mortgage interest, property taxes, maintenance, and depreciation starting from the date it's available for rent.

With the numbers you provided above, you will have to ensure you have healthy reserves.

Long story short, any owner-occupied property loan will require the borrower to show income that the lender can determine to be stable and predictable in their good-faith effort to confirm the ability to repay. 

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

Once your pre-approval is finalized, evaluate each property by inspecting it, confirming the rehab scope, and making offers based on realistic numbers.Drago

If not I'd confirm with the listing broker and then add a buffer. 

If the floating rate debt starts costing too much and there is no capital to replace a rate cap, reserves run out.  

I also have some cash reserves that I plan to dump into a contingency fund for each unit. 

@Hector Lewis - The decision ultimately depends on your current cash reserves relative to your financial needs, as well as your willingness to reinvest for potential appreciation.

I want to remain local in NJ or at most drive down 1hr to PA (self-manage or, last resort, hire a PM)However, I must also consider maintaining reserves, a safety net for my primary home, and an emergency fund.It's just hard for a new investor now :(