@Josh SmithMy colleagues were referring to Federal rules that no longer allow work-related expenses previously claimed on Form 2106.CA, however, opted to not conform.

Underwriting for conforming loans are "structured" for W2 people and not business owners, in general.What you are running into is common. 

With 18 years in the business I have a process I put buyers through and if they do not conform we are not a fit and they can go somewhere else.  

Alternatively you could use hard money, but I find that's very expensive and also short term only.You want to avoid standard residential conforming loans, those that most banks offer and are resold to the government. 

You don't need to use a DSCR loan unless you're buying properties that don't conform to standard guidelines or are trying to do cash-out refinances prior to the 12-months seasoning.It will be safer, and you'll sleep better, if you can: get the additional $10k from working, get a 5% discount on a house, find a property where you can add value through renovations or re-purpose and end up <75% LTV (aka., buy at a discount).

Typical terms will be 20-yr amortization with either 35, 60, or sometimes no balloon and the rates will be higher than conforming loans (about 1.5-2%).

This does at least make a STR more valuable for the properties that remain that can conform to the rules, but I would still be nervous about the rules continuing to tighten and eventually elimate an otherwise great STR property.I would consider at some point selling a STR before it wasn't allowed in areas where you can see the writing on the wall. 

The only potential issue I hear in your description is the parking -- when you split (in this case, via the SLSD), the resulting parcels need to be conformant with base zoning. 

They are not subject to all the government red tape for conforming loans. 

@Teresa Oss - you need 2 full years of tax returns for any conventional loan, it is a conforming loan requirement.