That's always the worst case scenario after the landlord-tenant relationship has broken down.

If you are going to be an owner-occupant, want a low down payment, and are planning to do a renovation, the FHA 203k and Fannie May Homestyle loans are your best optionsHow do you know the property is currently upside down on the mortgage? 

I am of the opinion that you'd be better served using that money toward the down payment on a property.

Pay Down the Loan Faster:I’m considering applying $40,000 annually to the loan principal.

Then if/when another good deal comes up, you can approach a lender and look at leveraging either of the properties in order to fund the down payment of the new property.

@Jordyn Ohsnot enough info to helpbut if you're using a HELOC for the down payment AND getting a loan, then you're probably negative cash flow given that's 100% leveragei would never do that unless i were going to refinance in the short term

We were able to get into it with a 5% down primary residence loan.

Here, we’ll break down what mortgage recasting is, how it works, and who can benefit from it.What Is Mortgage Recasting?

It comes down to how each county handles property tax valuation.To put it in generic terms - a title company & lender will base your initial mortgage payment on the property taxes of the previous owner.  

The rehab expenses don't line up but they are not stealing, I would suggest having a zoom call or sit down with their PM or account manager to see what is not lining up and where you see issues compared to what they have on their sheet.