But in all seriousness, they’re trying to make up for the many years landlords have been able to increase rents to outstanding prices.

There would still be an outstanding bill to the utility company, and typically those bills have to be paid before they will turn on service.  

You have no idea what kind of additional liens could have attached to the property in the last 4 years.It does seem odd though that he would have paid down the Balance Owed by $34,000 in 4 years.....of course verifying the outstanding balance is part of the escrow/closing process.

I have a fleet of 23 STR properties and it was not that long ago that I was able to acquire my first..

Equitable title to the property moves to the purchaser and only legal title remains outstanding until the closing.This is basic real property law in virtually every state in the US as far as I’m aware.

Some of these people have been sitting on the sideline for a few years missing part of an outstanding RE appreciation cycle.  

Once I explained the cash out proceeds would go to paying off the outstanding revolving debt, it became a non issue.

And yes the PMI is based upon the total amount of principal outstanding. 

That said, I generally see (depending on credit score and many other factors) no cash reserves required for the primary and 2% of the outstanding balance required of the investment property?

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