I collect their rent for a profit and when they buy the place I collect the equity created by the increase in the market and the decrease in principal from the payment of the rent. 

This will add to the expense of a rehab and decrease the profit margin of the investor.

For the purpose of decreasing income to debt ration to buy an investment rental property. 

Other things to consider or look for in this or other deals of this nature: Upside potentials 1.can you increase rents/decrease expenses 2.

My parents had picked up three in 2012 for very good prices through HUD and an individual investor but it seems that the number of properties has greatly decreased and prices have doubled in the last year so I am doing a lot more looking. 

Decrease income taxes on his income?

His wife took a year off and their taxable income decreased, which caused the bank to pull back on approving more loans. 

I am interested in finding locations, property types, and markets that have stable or appreciating rents and stable or decreasing vacancy rates to protect from the inverse in overall market downturns / medium income downturns so business can go on as usual (or better).

It's really just a smoke screen to decrease density.

It leaves the only downside being property value potentially decreased, to my opinion.Anyway I called 3 more demolition companies and asked for quotes.