One goal I'm working on this week is writing up an investment proposal for friends/family that would be interested in private lending.

I'm proposing the current owner becomes a partner by putting the real estate into the deal as equity for the partnership and thus creating equity for the lender. 

My question regards how the lender is calculating income in the debt-to-income ratio based on the existence of the partnership.)If we treat the partnership as a standard business, our DTI is unfavorable:Net rental income: $7600Other income:        $3000Total:                   $10600Debt:                    $ 6000DTI: 57%A DTI of 57% is above their limit.However, since Net Rental Income excludes $1000 monthly depreciation (non-cash expense) and $2,400 interest expense (part of the proposed debt), we were initially told that they would add back depreciation and interest expense, leading to a monthly income of $14,000, and a debt-to-income ratio of 43%, and that DTI would pass muster.The loan went to underwriting on that basis, but underwriting decided that they couldn't add back depreciation and interest expense, since it's a K-1.

The proposed cat is fixed so it's not that extreme, but I don't want to let it in if it's going to ruin the most beautiful feature of the apartment the first time it gets a urinary stone.

Check with local municipalities especially with Planning and zoning if there are any new proposals for grocery centers like Kroger or Meijer with fuel stations or any new developments being proposed in the local vicinity that would affect the business. 

You cant so much for $20 bucks these days.A lot of things he does seem capricious and without research (for example, his proposed "7-round mag" for rifles-expecting the entire industry to alter their products just for him). 

The Certified 203k Contractor only does their estimate/proposal AFTER they received the report from the HUD approved 203k Consultant, which will mirror the Consultant's report. 

My uninformed guess (I don't live in your state) is that the owners will have to vote on hiring (and funding) an attorney and on a proposal to establish a POA.

Let's wait for them to confirm or propose other date.

Propose a fee that covers the costs of you finding another tenant.