We have managed to save a strong down payment, both have credit 760+ and are not concerned about our ability to earn money (even in this unusual landscape).

. $4451 - $3900 = $541 rent lossPITI on new primary + 541) / monthly W2 income = DTI(Although in the real world this math is run per property... but the aggregate numbers would be the same.)The 75% rule applies to any property you've acquired recently (or put into rental use recently) such that it doesn't yet show up on your tax returns or was acquired midway through the year such that the info on your Schedule E wouldn't be representative of ongoing income and expenses).For a property that shows up on your prior year's tax filing, we analyze the Schedule E the math goes like this:Net Sch E income or loss + depreciation + amortization + HOA dues + mortgage interest + MI + homeowners insurance = net income(net income / 12) = monthly incomeMonthly income - PITI/HOA = rent income or lossThere's one more add-back that can go on the list above... if you've had unusual one-time expenses during the prior year (major renovations, disaster losses... pipe burst, flooding, fire) you can add those back.If the property was out of service for a period of time due to the above unusual expense, but has been re-rented, you can sometimes make a case for going back to the 75% rule.I should add that this goes for properties that show up on your personal tax return (whether titled to you or an LLC).

We are actually in Southeastern area, and this deal truly is unusual and that’s why I am interested but proceeding with caution.

If the latter, 5% is not unusual at all.

It's hard to be too specific without seeing the numbers on your property, but I can share a few small pieces of insight.From my experience, unless there is some unusual circumstance (like skyrocketing sale prices or new development in the area), many appraisers play it by the book.

The mean temperatures in Colorado Springs have risen in the last 50 years, and the number of unusually hot days has also increased, so while homes didn't used to need AC, I think it's a must now.For that reason, I'd agree with @Aaron K.

Both the assessed value & market values indicated on the county website seem unusually high to me.

I haven't noticed anything unusual other than the torn flour bag.

Unless you have an unusually small lot...

Am I out of line - I dont have much experience buying/selling a business so maybe I'm asking unusual questions.