Max is right, go to another lender. 

Go with a community bank or credit union.  5/3rd is too large to take a chance on you.5-10 branches max i would say.

HI Troy,Regarding lending based on DCR and cash based debt coverage, DCR is mainly used by commercial, local, and business oriented bank loans, while conventional financing and residential 1-4 lending generally focuses on debt to income.45% Debt to Income (DTI) = $2.22 dollars of cash flow or gross income needed to be shown for each dollar of monthly obligation you're looking to qualify for50% Debt to Income (DTI - $2.00 dollars of cash flow or gross income needed to be shown for each dollar of monthly obligation you're looking to qualify forThe above are some examples as each bank has different ranges of requirements.If the max is 45% DTI and the borrower is seeking a mortgage of 1500 but net rents are 750 then they are seeking to qualify for a net -750 which requires 2.22 times the income to receive an approval which means they need 1665 gross monthly income.Hope that example helps conceptually explain the residential vs commercial lending aspect.

Craigslist is a powerful tool to get a real world picture of what the max is that you can charge for rent.

Thanks Josh and Brandon, scottHere are my thoughts on the following...Airport or around the airport is a pretty decent area (excluding Antioch)Antioch was a good and and there are still good parts (i.e Brentioch and East Antioch going tword Percy Priest).

I was kind of hoping to stay around 500-600k Max, I am a first time buyer and want to ensure Vacancy isn't going to rape my bank account.

HARP refinance is no big deal, in essence its a conventional loan with a bit more premium pricing over standard conventional pricing, but the upside is that it does not require an appraisal so your loan balance relative to the current market value is not an issue (to a certain extent my max is 150% LTV for non owner and unlimited LTV for owner/2nd residences).If he can give you a 4.00% 30 year fixed I would double check it and take if I could!

I'm just struggling with trying to maybe offer a meet in the middle deal, vs. my desire to acquire this property at $205K max.  I

The absolute max I would pay for $2,400 in monthly cashflow would be $120,000 less repairs.

Take a full first month's rent and security deposit and then discount the second month but take a second payment on the deposit up to the allowable max? I