(Especially a 2-4 unit.)Do they have friends/relatives/co-workers that would rent rooms from them if they bought a property to show more income?

Take the proceeds and invest in a highly trusted Syndication or fund and enjoy the passive income.

You know, it only takes a phone call to reserve a large meeting room, holds about 250, if you clean up after yourself, it's totally free in a new facility, it called the Library.So long as there are no sales, no charges, not some income producing ploy at your meeting, you can use it. 

More on DSCR loans in case helpful: DSCR loans won't use your income to underwrite the loan.DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

I'll put them in order of what I prefer and why:1) Save up the cash using cashflow from my current portfolio and W2 income. 

My wife and I have overhauled our personal budget to reflect the 'pay yourself first' approach (allocate in order: income comes in -> invest -> donate -> fixed expenses -> variable expenses -> fun $$).We are looking to see what experienced people generally recommend for a holding tank for that 'invest' allocation while we target our first real estate deal.What financial vehicles have you guys used that works well for this?

Larger brokerages sometimes are in need of administrative work, which could earn you a steady income while also getting exposure to the field. 

I feel bad for the investors who are likely going to lose out on their hard earned income and invested in this company but it can also be used as a case study for other members of the BP community moving forward before investing.

If you need current income, I'd recommend another fix/flip.

First, banks do not prefer W2 income over 1099 income at all.