- Suggest you Google "Amortization Calculator" and run a few scenarios to open your eyes!

Most lenders require 6-12 months from acquisition seasoning before using the appraised current fair market value to calculate LTV.

It scales up to 37% once you get to around $12k of income but the UBIT is calculated after the first $1000 is deducted along with expenses and depreciation again only on the same % the property is mortgaged.

Do the calculations factor in default rates?

The property itself should bring in revenue ( even if you choose not to live in one side) and generally a bank will accept a portion of that rental income into the calculation. 

The denominator in the calculation is your capital/equity and with no debt the return on your existing equity is low.

If I choose the rental, then all income generated will be taxable income moving forward, because none will be off-set by the interest I could deduct.  

Research market rents, carefully calculate expenses, and ensure you have a solid lease agreement.

So eventually this negative cash flow property becomes cash flow positive and pays for itself including property taxes, hoa, mortgage etc.Trying to calculate how bad is my investment here or should i sell out if there is appreciation 

Many “wholesalers” get all excited when getting a property under contract only to discover that a thorough inspection by a knowledgable professional results in repair costs 2 - 3 times higher than they calculated.