@Hank Bank BRRRR is probably want you want to do.Buy, Renovate, Rent, Refi, Repeat.Before you go all in and either find out you don't like being a landlord or you make costly mistakes, start with just the next one.You'll have some challenges with tapping the equity in the townhouse:1) What loan amount can you qualify with your credit & income?

If you need more to do the rehab, perhaps instead of partnering, you could get your former boss to do a personal loan. 

It all started with removing some interior walls and changing the floor plan, removing a chimney, adding a bedroom and bathroom, installing patio door to the backyard, and completely renovating every other interior element What was the outcome?

I got a HELOC loan on the home for $130k.

Also, with a VA assumable, if the one assuming the loan is not a veteran, then the seller (veteran) entitlement will still be tied up in that property.

And addressing my item #1 comment, almost always, when a "distressed" homeowner is approached, they initially are grateful to have the loan brought current, but before long they forget the circumstances they were in and you become the bad guy that stole their house.

There are DSCR lenders will allow only a single 20 or 25% owner of an LLC to sign a Personal Guarantee (other owners are not on the loan, or liable for the loan).

When this person goes bankrupt in the next recession, this loan will be part of bankruptcy proceedings.

- Highly unlikely you'll be able to get separate water meters installed and submeter system probably too expensive for this few of units. - So, that leaves electric & gas.

You can purchase this with a low-money-down FHA loan.