I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

You would need to factor in the cost of the conversion as that would likely create a loss, then we would need to know your depreciation schedule.

The rate that you are at right now is, I would expect, the main factor limiting cashflow.  

Lesson learned that location is always no.1 factor and quality of renovation is the momentum of it and those two the most profitable combination.

Given your plans to use VA loans for multiple properties, it’s important to consider a few key factors when deciding on your next purchase.Since you’re already using a VA loan for the 2300 sqft home, it’s understandable to think about the size of your future properties.

I will be injecting new funds every year.Full Control: I enjoy analyzing deals and prefer to have full control over my investments, so syndication is not an option.Given that I'm a complete newbie in real estate, I would greatly appreciate your advice on the following:Selection Criteria: What factors should I prioritize when choosing properties?

Hey Jake - Rates are currently around the 7's, but the exact rate will largely depend on factors like your cash flow, LTV, and FICO score.

@Rob Ibarra Converting non restaurant space into restaurant space can be fairly costly from what I understand due to the need for larger than standard water lines to service the building and a general need for grease traps and other restaurant specific infrastructure.My first question around going from abandoned auto shop to kitchen is zoning, could you even get the use approved, and then are their any environmental factors in play? 

Definitely becoming more of a factor that will squeeze margins.

I finally got my inherited semi detached SFH (C+ working class neighborhood) ready to rent out but the attached house sticks out like a sore thumb and I believe the tenants do it on purpose as a deterrent and intimidation factor.