In this case, your monthly payment with 20% down will have a good MARKET rate if your DTI works with a much lower month payment and no mortgage insurance(MI).

The problem is that your debt payments are going to basically wipe out that $400K profit unless there is room to increase revenue or reduce expenses.

So same thing I paid my monthly payment to my bank and kept the rest.

The maximum fixed-rate period seems to be seven years, and there is generally a balloon payment at 10 or 15 years.

you may have to save up until you have enough money to do so - down payment, closing costs, reserves, etc.House Hacking: What Is It, How to Start, and Strategies for Successit's a more powerful way to get started. 

Some gurus tell practicioners of sub-to to hide transaction from the lender by saying the lender doesn't care as long as the payments are being made.

Perhaps we "buy" the house from them for the $328K balance to satisfy the lender and don't need a large down payment and then have a separate contract with them to pay $x per month until we've paid the full $172K amount.

If you are going to be an owner-occupant, want a low down payment, and are planning to do a renovation, the FHA 203k and Fannie May Homestyle loans are your best optionsHow do you know the property is currently upside down on the mortgage? 

The goal is to pull cash out as soone as possible to recoup your down payment and enough for the next DP purchase. 

I had specifically asked for numbers including mortgage payments and they emailed to me.