If the ARV has risen to $260k and you’re renting it out for $2900/month, you can likely qualify for a higher loan amount.Here are some key points to consider:Loan-to-Value (LTV): A typical DSCR refinance will allow you to borrow up to 75-80% of the property’s ARV, so for a $260k property, you might qualify for a loan of $195k to $208k, which could help pull out most or all of your original investment.Debt Service Coverage Ratio (DSCR): Since you're renting for $2900/month, the loan payment will need to be covered comfortably by that rent.

Another possibility is a cash-out refinance on your dad’s house if it qualifies, which would tie the loan directly to that property.

I have not thought of using DTI instead of 3x the monthly rental amount in order to qualify an applicants income, but you made a great point regarding the priority that tenants might give a car payment.

Plus, multifamily properties often qualify for owner-occupied financing options with lower interest rates and down payments.As for timing, here are a few things to consider:Market Conditions: Keep an eye on local market trends.

It does come down to DTI and what you can show versus what you can qualify for in terms of home price.

This being said, I don't believe we'll be able to meet the income requirements to qualify for a conventional.This leads me to believe hard money or private lender is more the only option to get my foot in the door, use my business to make repairs at very good rates, build some equity then refi once the balloon is due. 

The rules are more complicated than your one sentence, and even Tom did not have the time to explain all of them on his podcast. 500 hours is one way to qualify for material  participation, and there are other ways.

Higher loan balances we would likely see an opportunity in the future to refinance again due to lower rates so consider a 2-3 year prepayment penalty.Of course if you qualify for Conventional Financing (Fannie/Freddie), there are no prepayment penalties so just calculating out the return of investment timeline on point buy downs.Good luck shopping and let me know if you want to talk further!

You could also go DSCR if you're DTI does not qualify for a conventional loan and you'd still be at 20% down on DSCR.

I encourage you to consult with a qualified attorney to ensure this agreement complies with applicable laws in your area.