Interest only payments for the 6 months (no payments come off the principal) This may give you an opportunity to make extra money on the deal and give me an opportunity to close on my current deal the bank is working on, also holding cash back for my current remodel.

If he has the kind of equity he states, they shouldn't have an issue with doing this, and placing the amount owed onto the principal, and perhaps spread the loan term out to reset at 30 years, or even going to 40, which would lower his monthly payment, and lessen his burden, which is what I am guessing got him in the trouble he is in now.

Get a conventional loan and have them pay down your principal while you collect cash flow and don't have all of your cash tied up into the house.

In OR and WA, they require 2 years of full-time supervision by a principal broker.

On January 1, 2011, she evicts her tenants and moves into the house, thereby converting it to her principal residence.

You are also aggressively paying down principal on the property, so you are gaining equity.

pays off $800/month principal and 300 month CF (I manage myself and this doesn't include ANY repairs). 

A bigger down payment can lower the amount of the principal and interest being paid, so that DSCR can be met more readily - but that might not make that rental more attractive to an investor who is looking to have as little into the property as possible.

If you hold for that long and get a Fannie/Freddie loan or better yet a HUD loan, think of the principal that you could pay down and the depreciation.

The next loan payment will put $325 towards the principal.