My first question is what if things go wrong with the tenant (DG)?

First it was with Citizens insuarnec, now with Menatee insurance, before Citizens it was SLide insurance...He said Citizens changed my policy to Menatee.How come Citizens does not change policy on the house we live in?

Here's a bit more in detail about how rates are calculated for DSCR loans:1.

Right now, you have a property with a great equity position, solid cash flow, and cheap debt (interest rate is low). 

That's the whole point of a mortgage whether it's a fixed first or a HELOC.

Rates fall off a cliff if you go 25% down. 

You also have to check out your current lenders MAX CLTV rules because it may cause issues with the first DSCR lenders original note/agreement.There are some lenders that have CLTV rules or will not allow a 2nd lien if it does not confirm with their Max CLTV similar to a 'Due on sale" clause.

Quote from @Melanie Baldridge: In 2025 the bonus depreciation rate is 40%.This means that if you bought a property for $1M in 2025, did a cost seg study and found $300K in eligible assets that you could depreciate, you could take 40% of that $300K as bonus depreciation to offset your income in the first year.40% of $300K = $120K.You then apply that $120K to the owner’s personal tax rate to find the final amount that they can defer in year 1.If your tax rate is 37%, you can defer $66.6K.This is a big deal even at the 40% bonus depreciation rate this year.It’s a massive benefit 

They benefit based on the interest rate.

Most new neighborhoods have PIDs or MUDs and that reduces your returns at least 1% to 1.5% for the first 20 years.#4.