Use that loan to pay the back taxes and get things under control.

As Dan said though, there are many tax benefits.

You will need 6 months worth of the payment (including taxes, insurance, HOA) in liquid assets to show an underwriter.Now with doing a rental agreement, do I need to have tenants living in the home first or new prospects lined up before the underwriting? 

I’ve been working with real estate financials for a while, and I keep seeing one mistake that costs investors thousands: poor bookkeeping leading to missed tax deductions.🚨 Common issues I see:❌ Not properly tracking repairs vs. capital improvements❌ Missing out on cost segregation & depreciation write-offs❌ Scrambling at tax time instead of planning proactivelyI’d love to hear from the group—what’s been your biggest tax headache as an investor?

I have always used an excel spreadsheet to track/categorize all my purchases and then sent it to my accountant to prepare my taxes.

You would just be using the property's income to qualify.

My payment with insurance & taxes is $1425 a month.

More on DSCR loans: DSCR loans won't use your income to underwrite the loan. 

If anyone can advise or give insight on both greatly appreciated 

We walked with about $55k of tax free cash on a $147k house with $55k renovation budget.