This typically means lower down payments and better interest rates compared to traditional investment loans.

In San Jose I think that lowers the school fees cost/taxes etc.

When your rehab is done, hopefully those rates are lower!

If the answer to both added questions would be "yes", then you have a potential goldmine here.Combining the seller's concerns, and the reality of a big down payment being a negative to the seller (see Q: 1), you should be able to set the terms, with a lower DP, and controlled interest rate, to have this property CF and,...be able to sell the package to another REI down the road,...as long as you buy this using an LLC (a new one). 

As for a downward shift you can always lower your rate (underwrite a worst, middle and best case scenario), Make sure your rental stands out from the crowd (easy to do in Hawaii since most owners don't reinvest in their property).  

But look out, lower cost management companies make it back through add-on fees, so scrutinize that agreement carefully. 

However, if you have a reason to refinance (lower rate, more cash out) then it would be a much safer bet to get a DSCR loan and refinance into your LLC.

If your property is up to par you won't really have many maintenance calls except minor stuff such as plumbing clogs which is more likely to happen and requests to turn the AC up or down which you can do on your phone but other than that pretty hands off.Vacancy depends on location and your Padsplit property score the more comfortable you make your property (mini fridges, tv's, outdoor area) the lower your vacancy rate but you can expect about 10% vacancy factor in a Padsplit friendly area (centrally located, easy access to public transportation).

Then I submitted a lower offer of the same ratio as before.

While traditional banks provide lower interest rates, they come with strict approval processes and long wait times.