DSCR would require rental income to qualify. 

We use 2 applicants of how many in total, to qualify for the home.

Like Ben mentioned, there are different factors to determine who in this scenario would have capital gain, and the amount if there's depreciation, and if any qualify for the primary residence exclusion. 

Transforming SFHs into multi-units and targeting 2-4 units for value-add potential is a smart way to build your portfolio, especially if your goal is to qualify for larger loans down the line.If you're aiming to hit the 5-unit mark and unlock better financing options, here's something to consider:Leveraging BRRRR Strategy: You’re already thinking about the refi route, which is key.

Another question is whether these properties are being repriced to their fair market value and how long it might take to find qualified tenants in this area.

Just ask a qualified agent that gets done at those price points what they charge and add it to the sales price, and the buyers side too.

However, they do have certain standards your property must meet to qualify for the program. 

They do qualify you based upon the cash flow of the property, but they have high origination fees, prepayment penalties and higher interest rates than conventional.  

Once you qualify for REPS, your current losses are unlocked but your past suspended losses remain locked. 

Certain renovation costs can be eligible for Qualified Improvement Property (QIP).