With this in mind, if you intend to leverage short-term debt (hard money), it's even more vital that your underwriting is thorough and that you have the correct systems in place to tackle potential issues.

We raised $4.5 million in equity and got $4.5 million in fixed rate debt from Freddie Mac at a 5.85% rate.

Was it included as a credit/debit on the HUD so it should have reduced your cash to close? 

FDCPA controls debt collection and makes sure that buyers  of defaulted debt don't threaten borrowers with violence , phone calls in the middle of the night and non-existent jail sentences for failure to repay.

We are considering selling it and investing the cash we get from that in another deal or paying off our consumer debt faster!

The main reason I ask is because that is significantly below primary residence mortgage rates let alone any investment loans, if you can get rates like that I might need to make some changes on my end hahahTo answer your original question, assuming all else is equal long-term fixed rate debt is valuable. 

The country has massive debts and deficits. 

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

Most lenders I've worked with will use the lesser of the current rents or market rents reported by the appraiser when calculating your debt service coverage ratio. 

Hi Anthony, it sounds like you’re in a good position to start building your STR portfolio, especially with no debt, great credit, and rent-free living!