For a new Commercial Loan, DTI is ignored and the new property DSCR is the tell all metric.Income from your other B&H properties(MFUs), it's  purely income as the Sch-E washes away expenses including mortgages. 

I was pretty surprised when he was he first to say "sure, that's fine."

The owner of the house doesn't know how it got up there or who's it was.  He

I'm submitted my first offer today.Sq Ft = 1,018List Price = $65,000Initial Offering Price = $32,000Max Limit = $40,000ARV = $125,000Realtor Fees = $7,000Closing Costs (Buy & Sell) = $1,200Inspection Fee = $350Holding Costs (Personal Loan) @ 6 months = $4-6,000Total Variable OH = $14,550Rehab Costs w/ contingency = $34,900Net Profit (ARV - Variable OH - Rehab Costs - Purchase Price) = $35,550Net Profit After-Tax (Impose short-term capital gains rate at 39.6%) = $21,827Work that needs to be done:Rebuild mudroom and re-route washing machine/dryer lines = $4,000Kitchen Rebuild: Cabinets = $1,000Granite CT installed, sealed, beveled = $1,400 New appliances (may use a 2nd hand shop) = $3,500Flooring and back splash = $1,500TOTAL Kitchen = $7,400HVAC (received quote w/ ducting install) = $6,000Front porch repair = $1,000Half-bath install 12 sq ft (@ $100 per sq ft) plus cost of supplies & equipment = $3-4,000Add closets to each bedroom = $1,500Fix ceiling water damage = $2-3,000 Foundation leveling (house has settled) = $1-2,000Renovate full bath (replace tub, new vanity, replace toilet, re-tile) = $2,500Simple landscaping (mulch and shrubs) = $500Fixtures and Hardware = $1,000Contingency = $2,000GRAND TOTAL = $34,900I'll be doing the majority of the work but will have to sub-contract out construction of the mudroom, half-bath install, and closets.Immediate Questions I'm concerned about:1) Cost to rebuild mudroom.

When Eddie recognized who I was, he said "oh, I guess you're not going to let me put it under contract, huh?"

I can tell you from being on these board a while (1) those typical BP ratios do not work in high value areas such as LA, NYC, Wash DC, etc. and (2) people invest in those areas anyway, not for cash flow as much as the anticipation of appreciation.  

So yeah it may cost the average borrower about you 1.125 pts "more," upfront but that was marginal since there were so many ways to "absorb," this cost for the average buyer.Back in those days I'd just help the buyers agent negotiate this 3.375 pts from the seller since it was a buyers market and sellers were desperate so most of the time the buyer came in with 3% down and did not have any monthly mortgage insurance because the single premium MI cost was delegated to the seller and was a "wash," after the seller credit.

One hand washes the other.

Have your kids do the laundry, wash the cars, mow the lawns(where you maintain a home office) etc.

Not hardi board.I've done an exterior of a house where I would power wash the house first thing in the morning.