The most obvious example is when a borrower misses a payment, or two, or three.  

The fact that our current rate is only 3% doesn't help the refi situation, as we probably would not be able to afford (or would at least struggle to afford) the payment on the new mortgage with the higher rate and principal.I think the best way to max cash flow would be with a small multifamily that needs moderate rehab.

Also that will give me a lower payment which will allow me to have bigger profit from rent.

My thought is is use the Rent Ready feature of reporting his payment history to the credit bureau so it can work in his favor as a trade line, but I'm wondering if this is an unnecessary added step since he can already pull transactions on his bank side. 

I would probably structure it as debt like a loan and possibly break it up into quarterly payments or whatever you think will work best for you as far as repayment. you can get creative....

@Drew Sygit, Last November Fannie Mae began accepting 5% down payments for owner-occupied 2-, 3-, and 4-unit homes.

Living in one unit and renting out the other helps you scale quickly because you need a lower down payment for a primary residence. 

As with any insurance you need to weigh the cost of doing the repair yourself vs the cost of the premium payments.

Moving the LLC neither changes your loan, nor your lien, nor the personal guarantee I trust you obtained.

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