Spoke with multiple credit unions and they mentioned a rental property needs to show at least two years of rental income in order for that income to be counted into the DTI ratio. 

tax lien or tax deed

They get a yearly depreciation deduction on their taxes for the house and may have nearly depreciated it to $0.

@Leslie Beia what do YOU think $30k income would come fromHow many doors?

They've gone as far as writing algorithms that pull data points like crime rates, age, median income, number of coffee shops and hundreds of others to create heat maps of where to buy.  

My goal would be to purchase the property, make cosmetic upgrades to the lower unit (3BR/1BA) and get that rented out ASAP so I can get some income going while I finish up larger projects like the roof and upgrading the upper unit. 

With $1mm cash we can do 3 locations netting $40,000 before income tax per month.  

In doing so, bear in mind that the cost and admin of a corporation is higher and that the tax treatment is different:1.

I am in one of the higher tax brackets and could be saving around 40k~ a year on taxes with this.

My goal is to leverage that equity for additional income.