My understanding is that normally the 2nd lien would have to make the senior lien whole to preserve it's rights, which I don't see happening in properties without even enough equity to satisfy the first lien/mortgage debt.Based on your response it sounds like I'm taking title without any of those liens, but want to double check.

@Paige Seeley - thanks ...the min down payment for a 1 unit rental  property is 15% ...so putting  20% down isnt that much more ....recasting  isnt always  offered for rental properties so you would need to check with lender ....recasting normally has an admin fee of $300-$500 

There's been maybe 2 built in 5 years here. they are called Tri village self storage. the climate controlled portions are normally vertical and at least 4-5 stories and normal walk up doors are single story. there is some smaller units but real climate controlled development is vertical not horizontal. 

Normally I wouldn't be targeting this one, just hard to pass up the discount + 10k year in "gifts" on the seller financed portion. 

They have too many rules that they put OVER the normal underwriting with most loan types.  

I wouldn't touch a 2 million dollar luxury home. the land cost at 400k is too much as a percentage of the after built value too. we try to underwrite 10% and normally try to buy land that has 5x multiple through zoning or entitlement for additional upside.

After a tenant moves in, we normally call to verify with the utility provider that the tenant has setup their own utility accounts. 

I showed in another thread the supply trend and price trend, it's very linear which is not normal but I guess for markets sub median home price it's okay. 

What I would not do it state a number outside the expert range such as a 50% decline (that you used) and attempt to pass that off as the normal decline.  

You're income certainly isn't "normal" and some banks might shy away but this is a personal business and if you have a track record, I think you can find a bank to say yes.