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).

To my knowledge, Microsoft does not turn your stored data into an asset which they then use or sell.

Again, the BiggerPockets store has some books on this topic, or you can learn about it by watching podcasts, reading blogs, and interacting on the forum.

While I have some reserve and a HELOC on one of the properties, if something big happens while in school (busted pipes, fire, HVAC goes out, etc..)

With a 10% down payment, you can still leverage your savings effectively while keeping some liquidity for reserves and future investments.FHA Considerations: If you're considering another FHA loan, keep in mind the FHA rules regarding primary residence occupancy requirements.

From reading your post, it seems that your monthly cashflow might be in the negative with all expenses considered.If you don’t go with the above, then you’ll be dependent on whatever you have set aside for cash reserves to keep the townhouse running.

If I am not reducing the principal, then I will add it to my reserve account.  

I will just need to make a dedicated location to store the spare set so that the tenants won’t use them during their stay. 

No, this wouldn't be possible - the down payment would need to be liquid and pretty much all DSCR Lender's won't allow a 2nd lien on a purchase (also requiring both liquid DP and liquid asset reserves)

Establish a solid reserve fund (3-6 months of rent) to cover unexpected expenses or vacancies, which are inevitable over time.Make sure you're well-versed in local landlord-tenant laws to avoid legal complications.