There are far fewer ARM's (Adjustable Rate Mortgages) than there were in 2007/2008.

A 2-3 bedroom is more likely to get a family or couple and will appeal to more people, the 4+ bedroom will appeal to fewer people. 

Any fewer and it is an investment and not a second home.The IRS rules for being an investment property (and unlocking most of the tax advantages) are that the owner cannot stay in the home for more than 14 days.

At that rent point, maintenance, cap expense, and tenant turn over will consume a lot of the rent resulting in low cash flow per unit.  

The rate of interest on policy loans for large and reputable mutual companies is always going to be competitive relative to commercial or consumer lending.

For people with fewer than a dozen doors, this isn't bad.

For an uneducated consumer or depending how strong their sales team is this is a very raw deal.

For consumer debt I agree.

The debate can be summarized as: For smaller properties trailing financials have many reasons to be wonky, but many believe it is a good signal of transparency and (as @Ben Leybovich points out) this higher variance is exactly why due diligence on the leases can be more important for smaller properties.Line between "commercial" and "residential" seems to be driven mainly by number of units (i.e. is it eligible for FHA loan), even though many commercial banks will underwrite loans on residential properties with fewer than 5 units (especially at larger loan sizes).Is 7809-7815 Franklin a hot deal?

1. pass legislation limiting what the "free market" demands2. suffer the consequences of the elimination of the "supply" demanded by consumers in the free market3. suffer the consequences of the "law of unintended consequences"4. blame "capitalism" for failure to provide what was eliminated by previous regulatory action5. pass more legislation to counter balance effects of previous legislation