That means 20% of the loan to the lesser valued houses (3) and 40% to the higher priced home (1) for a total of 100%.When you sell one of the houses, you typically have to pay 110 to 120% of the allocation loan percentage based on current principal. 

The median price is still just $90k and I wouldn't be surprised to see it double again pretty quickly.The other nice thing about Michigan is property taxes are capped at the rate of inflation with a max annual increase of 5% per year.The biggest drawback of Detroit is tenant quality IMO.

While not in TN specifically, I have assisted clients do as you have described: live in a property as a principal residence for 2 years, rent it out for 3 years, then sell.Based on the situation described, you would appear to be eligible for the MFJ joint exclusion on principle residence on your 90% share.However, in order to retain that ability, the house will very likely need to be sold (ie, sale closed, not just under contract) by the end of this month. 

The cash flow is okay, it's not great, but the principal pay down on this loan is over $10k per year, and this is a great location, so the property value and rental rate will continue to appreciate over time.

Once you hit those numbers, then you can focus on putting extra income towards paying down principal.

low cashflow high appreciationNotes purchased in the secondary market at discount to remaining principal balance have the built in capital gain profit with potential for greater ROI thru early payoff or early PARTIAL paydown.  

I am the principal broker of Reafco.

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Cash flow, principal pay off and of course appreciation are all a function (percentage) of your portfolio value.