A couple of years ago, I worked with an investor who never updated the contact information for the loan and the Bank call the seller (ex-wife), that day she was mad at her ex-husband and told the bank her ex allowed someone to steal their property from them and they got no money, she was kicked out of her house and there were strange people living there.This could all have been avoided if the investor did this process correct.Get educated, also I do not know your attorney but not many attorneys have the knowledge to do this process correctly. 

Nothing illegal about doing that, but if caught, the lender may call the loan due and if you don't correct the situation or pay the loan off, they willstart mortgage foreclosure.3) You could also go the HELOC route to tap the equity in the home, but the 12-month owner-occupancy will also apply AND the interest rate on the HELOC will fluctuate with the Fed Fund Rate.4) You could do a cashout refi as an investment property, but that will be at an interest rate 0.5-1% higher than owner-occupied rate.Suggest you meet with 2-3 lenders to explore your options about the above.Once you have access to funds, recommend you buy a 2-4 unit with 20-25% down. - You can buy owner-occupied, live in one unit, and fix up and rent the other unit(s).- If you're handy, recommend buying a property in the worst condition you can tolerate.

You are correct in your assumption that it will impact how low they can go on the down payment, though, b/c commissions will need to be paid out of closing costs. 

Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice.

I was thinking about my previous reply and need to correct myself.

I'm going to take a wild guess that those are STR or MTR rents, is that correct?

Please correct me if I'm wrong, but wouldn't a single-family home be a better option near Disney World, especially one with a pool, if it's affordable?

Correct.

I would tell them once they contact the credit agencies and correct all the information, they are welcome to apply. 

Asking in the correct forum will get a better response.Read the RULES!