Starting small with solid fundamentals and not waiting for the "perfect" deal was key to getting started.

I only ask because you said you are new to this.The S8 rents you see on the HUD website is gross eligibility.

For a JV structure, both borrowers would need to qualify personally since LLCs aren’t eligible for these programs.

If you are NOT running a trade or business - 1099s are not required.The main reason why you WANT to be "running a rental trade or business" is your eligibility to claim business overhead deductions, such as marketing, education, technology, and so on.

It’s not for distressed assets or owners in financial trouble—it’s for properties where the fundamentals already work, and the owner is looking for a way to expand, reinvest, or access liquidity without the time spent for loans or getting a full sale made.

The leverage aspect is my business, the fundamentals of the business is via the DSCR loan so it must qualify and I don't tinker to qualify.Every market I am turning to is like this, and every bit market I've been in is like this.

There appears to be a fundamental misunderstanding, Brent.

Here is a fundamental flaw to Sub2, that this situation seems to exemplify. 

He said abusive Section 8 tennents can be reported and can even lose their Section 8 eligibility. 

Choose a location with low-cost homeowners insurance because they have the lowest risk of natural disasters: Insurance - ValuePenguinIf you follow the above process, you will now have a short list of potential cities that are very likely to appreciate much faster than others due to their strong fundamentals.