Do you typically reevaluate your current returns based on the net equity you have in your properties?

My largest concern based on the marketing package is the value add I can bring to the property, and the HOA fee's which aren't apparent in the marketing.

We are based out of Kokomo which is right outside of Indianapolis.

It did not make a loan, so that is false advertising, and the contract, which is the the mortgage, is based on fiction, otherwise known as fraud. 

As already mentioned, he wouldn't be able to use rent from roommates to help qualify but based on the numbers you shared there should be a VA option available considering how much flexibility there is. 

Quote from @Brandon Leffler:I may sell my condos in CA as the HoA's have climbed to 400$/mo I wouldn't sell your condos solely based on HOA fees being $400/mo.

I am not sure what tools you are using for your cash flow projections but it's possible to have a property that does not cash flow year 1 but will in year 2 or 3 and so on based on average historical appreciation in Austin TX. 

After 20 years in the investing game, plus working as an investor-friendly agent, I’ve learned that hesitation can feel like a big hurdle but often ends up being the push you need once you break through it.I’m personally based in San Diego, California, and licensed here, but I’ve also looked into projects across the country with folks who sought better cash flow.

My gut tells me they are pushing the revenue and basing the homes value on that.

Each option has different implications, so choose based on your financial goals.