While we are both gainfully employed and have good income, our DTI (Debt to Income) is obviously incredibly skewed even though our properties cash flow. 

Hopefully they will get caught and never steal peoples money againHi Sandy,I’m out $20K+ because of them, and as a self-employed single Mum of two teenaged girls, this is a huge blow.

Unfortunately many lenders will see this as a red flag and may not take the risk to lend you the rest of the money even if you use stated income program or bank statement program but those are for self employed borrowers who have active income from their business but write off to many expenses that when filling their taxes their net income is really low or sometimes negative.

**Verify Employment and Income Directly**: Since they might lack a U.S. credit score, contacting their employer directly can help verify their job status and salary.

Instead of using your personal income, employment history and DTI to qualify, a lender would look at the income or potential income of the property to make sure it cash flows after taxes and insurance are accounted for.

@Eric HemplerIf you are not employed by the sponsor then yes you must be a licensed broker-dealer.

More often, I see people in Chicago using the MTR strategy to side step the STR regulations.I've considered buying a SFH with an in-law arrangement in Chicago to use as an STR because to me that seems like the best way to employ the strategy.

Being that your brother lives here he must show he has employment here in NY he will be good for the loan using FHA.

My brother in law works for them, absolutely loves his job and his employer, so very hard to be objective about deciding to invest. 

Running background checks on tenants, criminal, eviction, employment history are some way to determine if this is the right tenant for you.