Sounds like you are getting hit with a lender who has overlays and possibly miscommunication between the loan officer/processor to the underwriter.

Actually you'd never hit that because eventually the debt pushes you into a margin call and forced sell and you'd be at or near $0 in just handful of years at best. 

@Jordyn OhsThis is glass ceiling everyone hits but absolutely surmountable.

If you can design something like that and hit those rental numbers than you're going to be very, very happy with the investment. 

So I did a 3-2-1 buydown and secured a 2.875% interest loan for the first year of the loan, and it will gradually go up a percent each year until it hits my rate of 5.875%!

Or is it calculated daily and the base rent increases after 10 days when the late fee hits the account?

If that investor hadn't planned it carefully and re-invested that money into the property or even the purchase of another then a recapture fee would hit them hard. 

The truth is that New Jersey, especially Northern New Jersey, is a tough investment market due to low inventory, high competition, and high taxes.

If you're more of a 'personal referral' person than a 'do research online' person, and this is local to you in Manhattan, KS, hit up one or two of the trades people in the "little apple all stars" BNI group.

We find that having the tenant pay for all utilities and taking the small hit on rent we are far ahead over supplying utilities to the tenant.