The higher the risk, and the lower the DESIRABILITY, the greater the cap rate.First  we need to lower the $85k “net” to probably $60k to account for property management.  

I think the person in the mirror has reached the top of the knowledge limit and needs someone that is an expert to move me to a higher level. 

I want to focus (I think) on family-friendly higher end neighborhoods. 

However as you correctly point out this is far more risky and or its risk capital compared to buying a income property.. but the reward can be strati-spherically higher .. not just a little bit but it can be life changing profits on some of these deals.

By leveraging real estate in areas with lower entry points and higher returns, you can grow your wealth more effectively without the heavy financial burden of a luxury home.

Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders.

If your DTI is already high, taking on a higher loan amount might not work.

DSCR loans are easier to qualify for when the asset values are a bit lower and rents a bit higher.

(They both shrink your pool or buyers and combining them really shrinks the pool.)Assuming you don’t plan to do a 1031 exchange you’ll also pay higher taxes if you can’t spread them over two calendar years, but not much. 

Here’s what to consider:Equity Pull: Lenders will generally allow you to cash out a percentage of your property’s appraised value, typically 70%-75% loan-to-value (LTV).If you have $60k in equity, ensure the appraisal supports your valuation.Commercial Loan Terms:Rates may be higher than your FHA loan.Terms are usually shorter (e.g., 5, 7, or 10 years with a balloon payment or amortization up to 25 years).Debt-to-Income Ratio (DTI): Moving the loan into your LLC and using commercial financing will free up your DTI, as the debt will no longer report under your personal name.3.