However, we don't see prepayment penalties on owner occupied loans.

DSCR is available for an LLC to use for purchase and cash out refis as long as you never plan to occupy the property yourself.

and if you buy something that's occupied and needs work, again, it might be a great opportunity. 

@Kris Lou Be careful with agents as 95%+ of them really only know how to handle owner-occupied transactions.We don't do biz in Indianapolis, so this is unbiased info we hope you find useful:Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

That said, there are specific contractors who like working with investors since they can avoid the hassle of working on occupied homes.

Occupied with inherited tenants or vacant?

The demand for rentals remains strong, and with tenant-occupied properties, the risk of vacancies is relatively low.

Washington D.C. has also finally acquired the RFK Stadium (Source) from the federal government, a long-sitting vacant stadium in the NE quadrant of the District, with the plans to have the Washington Commanders come back to the District from Landover, Maryland, and occupy the stadium after a full renovation, who are currently a top 4 team in the NFL.

Quote from @Shaheen Ahmed: Why are property taxes are double or triple on rentals than owner occupied?

As for the "seasoning", some lenders will require the property to be "stabilized" (perhaps 80%-90%+ occupied, depending on the lender) for 3 months, 6 months, etc. before they'll do a cash out refi.