I searched for homes based on the mortgage I could afford.

That said, there are alternative ways to meet the requirements, and with proper planning, you might not need to rely on these specific tests if most or all of the participation comes from you during the first year.

They originally wanted 360k, but the mortgage would have the property running negative for the foreseeable future until all renovations are done, which I won't do. 

It falls short of the 1% rule which with current rates is not sufficient in most markets to have achieved real cash flow after properly allocating for sustained expenses. 

I'm located north of Houston, Owned a Real Estate Mortgage company years ago.....

Would’ve paid for my mortgage easily, and I’m gone anyways!

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

Common deductible expenses include mortgage interest, property management fees, repairs, and even travel expenses related to property management.

I searched for homes based on the mortgage I could afford.

This is my first personal mortgage so I'm trying to learn the game.