@Nick Vogel   Nick – thanks – that’s helpful ...find out what the terms ( rates ....loan fees ...closing costs etc) for both option ......try to total up the FHA UFMIP and also the FHA MI payments for 5 yrs to see what this amounts to .......a 95% ltv conv loan for an owner occupied MF property with no mtg ins sounds a bit unusual ( fishy ) ...but maybe this is accurate ....with the 5 yr arm – you aren’t required to refinance the loan after year 5 – the rate and payment will just begin adjusting every 6 months or every year ( not ideal when the loan is on a rental property ) ....if you plan to refinance or sell the property within 5 yrs - use the conv loan arm option .....if planning to hold it for more than 5 yrs - avoid using an arm and try to use a fixed rate ( this shouldn’t have a rate much higher than the arm you mention ) ...keep me posted and good luck Dave Skow

He also mentioned that the HOA changed the roof 6 yrs ago. 

If the wife reports expense of $7200 for mortgage interest ($187.5k @ 4.25% has about $7200 interest in year 1), $5000 on property taxes (250k x 2%), and about $4400 in depreciation (depreciating only the building, which we will say is 50% of the $250k for 27.5 yrs), the total is only $16,600. $86k - $16.6k leaves $69.4k to be taxed, right?

Sold rental property 2 yrs ago that had ground rent.

IE 12+4 yrs

That was 10 yrs ago.

I've been living in Ulster county for 24 yrs, but just getting into RE investing.  

I feel that I would be much more comfortable with a turnkey provider who says I have built or rehabbed the property and stand behind it for 5 yrs.

I am a newly licensed realtor in NS (I was licensed in ON for 8 yrs).

It took me around 24 yrs though to get to a really good place with it.