With two UCC filings from two lenders (there could be more), they're borrowing money against their accounts receivable at a high interest rate, and he believes it's very likely they will default.

Your situation is a little more complex than most people and I highly suggest you consult an attorney. 

@Collin Hays My favorite that came in at 6am one morning when the nights low temperature was 58 degrees and the high temperature was to be around 75 was the following.

This is highly lender-specific; there are no universal guidelines for DSCR loans like there are for GSE/Govvy loans.

We make sure to do the work to a high degree.

And when talking to a buy you say "ha, ha, ha, look at the deal we got, we got that person to give us all this $ from there cashflow"The whole thing wreaks to high hell. 

I have liquid assets and want to make smart, scalable investments that balance cash flow, appreciation, and low risk.GoalsGenerate consistent cash flow to diversify my income.Maximize appreciation potential for long-term wealth growth.Invest in areas with low crime rates to minimize risk.Reduce my tax burden for 2024 with real estate purchases.My Current ThoughtsI’m torn between two main strategies:Multifamily Properties:Looking at markets like Austin, Raleigh, and Tampa for 10-50 unit multifamily properties.Love the scalability and centralized management, but I'm concerned about high upfront costs and competition.Section 8 Housing:Considering affordable markets like Memphis, Cleveland, or Indianapolis to purchase 5-10 single-family homes.I like the government-backed rent stability, but managing multiple properties across different locations seems intensive.Key QuestionsWhich strategy would you recommend for my goals and liquidity?

This isn't just high risk your talking about Zach, your talking about compounded high risk. 

Sometimes they forget to tell you that many tenants in Detroit don't pay (depending on the property manager skill and the type of tenant) - but taxes are very high in the city and so is insurance. 

If either you or the investors are not highly experienced, this system is very very difficult to slow the first couple flips profitable.