There is also a mismatch on what he was paying for rent versus what he disclosed on his application (previous rent was lower).

SFH typically have lower cash-flow and higher appreciation while MFHs have higher cash-flow and lower appreciation. 

I've owned this home for a long time, but in the beginning, property tax and home insurance, were way lower.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

Investors will sometimes choose the second option / 40 year term because during the 10 year interest only period, the mortgage payments are lower compared to a 30 year fixed so more rent is going into the investor's pocket.

They're like bank & credit union loans... but with (i) more leverage, (ii) more interest only, (iii) [typically] lower rates, (iv) non-recourse structure, and (v) no deposit requirements / no requirement to start "a relationship". 

This lets you access your home’s value without touching your savings, and the rates are typically lower than what you'd get with a hard money loan.Many first-time flippers also turn to hard money lenders, who focus on the property’s value and the flip's potential rather than your personal credit.

You can offer to lower it if it goes back down.  

Generally, private lenders offer more flexibility and lower fees than hard money lenders.

Vegetation and Tree Removal are crucial especially for these lower end properties