Thank God we are not living those times any more.It seems that you are a  young person, so naturally, you may be comparing the rates you were recently quoted to the rates of January 2021.

Sure you need bedrooms and bathrooms (with 6 bedrooms make sure your house septic is adequate according to your Township laws about occupancy limits) but in order to get booked compared to other houses, you need to look Instagram ready.

There are certainly people who skirt the rules by not disclosing the nature of the downpayment money or where it comes from but it seems like your partner is doing this the right way.

To me this makes little sense if you can get subsidized loans (meaning qualifying for Fannie Mae, NOO rentals) because 1) LOCs are short term debt and rentals are typically held longer term and 2) there is no guarantee the LOC wouldn't be called due by the lender... that's the nature of credit instruments. 

Then you would need to look at the pure cash flow play of what type of rents can you get and is your cash flow return adequate to make the deal worthwhile, even if the residual value isn't there in the short term.

I think its going to just take some time for the end buyers in the chain (the people responsible for buying the MBS through the whole process - generally banks, insurance cos, pension funds) - by nature are very conservative and slow to adopt to new things like SRO.Its a tough situation because the message a lot of times ends up being "rent it out traditionally on a single lease since thats more conservative" yet they are out of touch with investors who can only cash flow in this current environment with creative solutions such as rent by room, etc.

Conducting thorough due diligence, maintaining a healthy cash reserve, and obtaining adequate insurance can mitigate these risks.The Road to Financial IndependenceReal estate investing is not a guaranteed path to wealth, but for those willing to put in the effort to learn and grow, it offers a viable route to financial independence.

Personally I'm not really worried about natural disaster type issues in DFW. 

But that's in the nature of capex, you are upgrading your assets.

Think thats just the nature of the beast.