She said she did and there is no debt on that..

That is a loaded question/answer because it does come down to DTI (debt to income).If you can afford (2) homes you can buy an investment first and still qualify for the 3% down.

Look into a DSCR loan that uses the property's cashflow instead of your personal income to qualify.This is a tax free move as you are using debt plus you still benefit from all the benefits of still owning the first house.Your future self will thank you for stacking houses this way as your cashflow and equity will build up over time creating long-term wealth.To Your Success!

For this deal, my mother and I secured financing through a Debt Service Coverage Ratio (DSCR) loan, which allowed us to borrow based on the rental income potential of the property.

As you mentioned, your appreciation is based on the 700k figure but you are also getting debt pay down as well.

Unlike DSCR (Debt Service Coverage Ratio) loans for smaller multifamily (i.e. duplexes, fourplexes, etc.) that allow market rents (not actual rents) to help determine if the property covers the mortgage payment, commercial loans look at what is happening today.

Even with low expenses and no bad debt it's financial suicide given our income. 

Leverage Equity WiselyTapping your home equity via a HELOC or cash-out refinance can accelerate your multi-family investments, but you must factor in the debt service to ensure it doesn't kill your cash flow.

We are partially owned as of 2022 by Sumitomom Forestry, which means we have no bank debt and self fund all our building projects. 

Or are you the flipper that will be taking on debt to fund your flip?