Note I have every intention of doing exactly what I told them I would do and I suspect every tenant has believed I would do as I say because their interactions with me would not lead them to another determination.This explanation combined with good screening and some good luck has so far resulted in no need to evict anyone in 50 years.  

Those issues can affect any HOA in any geographical market, at any time.Good luck!

This is how it is supposed to be handled but some lenders have overlays or loan officers are not aware of the actual guide lines or rules depending on their organization or who they are selling the loan to in the correspondence channel.I have come accross this several times you simply make the underwriter aware and in some cases the agents and appraiser are informed as well in case there is a need for an outside LOE letter of explanation. 

Going in will really help you get a much clearer explanation of what is going on and what is needed to remedy. 

@Brent Coombs Thanks for the explanation.

My recommendation would be to plan to achieve a diversified portfolio across sponsors, geographical areas and asset classes. 

You are comparing to large geographic areas. 

The reasoning, as I remember, was some combination of 1031 exchange, increasing ROE, and leverage.Does anyone have a good resource or explanation summarizing the logic?

The question of how soon, the answer is much sooner than any of us wish to believe, As humans expand into new territories both geographic and genetic. 

@Natalie Bender, great explanation of DSTs.