Your biggest issue with 5 bedrooms is that 50% of your income is going towards the mortgage, I do not believe banks would even lend to you with a DTI above 40-45 (mortgage + other debts).

They do say they have a one time fee for debt collection and I suppose negative reporting with a 30 day delay and dispute process. 

This often breaks even on your current properties making them more or less a non event in your debt to income ratio. 

The capital stack is approx 70% debt, 5% pref equity and 25% common equity.

After purchase, you can do a cash-out refi of 75% of the appraised value to free up your cash again, and repeat.There's also DSCR (debt service coverage ratio) loans.

Not sure how often that happens and to the extent it does, how much individuals are receiving.Trying my best not to politicize this, but have to add that massive bailouts are going to continue to get harder to afford with the high federal debt we have today.

So, I believe this would require me to get additional debt via a separate loan at a rate higher than my mortgage rate.

Older and less interested in risk/debt?

Currently, I’m working on clearing my debt and saving as much as possible, with plans to start my journey by house hacking with my partner.

Heidi, if you do a 1031 exchange, both the capital gains and depreciation recapture can be deferred, but the recapture isn’t eliminated—it just gets pushed to when you sell the new property.