in what I just laid out, you'd make monthly payments to the seller just like you would to a bank for 5 years, and then the remaining principal balance of the loan would be due, at which time presumably you would refinance the house into a commercial mortgage and use the proceeds to pay off the seller. 

That's three months of mortgage and utilities, the cost of flooring, and the cost of painting.

Traditional Mortgage.

Also, cash flow from the rental needs to cover your mortgage, insurance, and taxes.

The house would push out the same 1300 a month, but I would have a mortgage loan.

If i buy a property only to cover the mortgage, then come out of pocket for repairs, then it sounds like more of a flip than a rental property.If cashflow doesn't cover all the operting expenses, it doesn't necessarily mean it is a bad investment given appreciation.

I'm a commercial mortgage broker and would love to connect and discuss some financing approaches and strategies for this acquisition.

Good morning @Joshua MartinGreat thing about a VA mortgage is you can do an IRRRL even after you have moved out of the property!

(yes, some of the Non-QM lenders that do DSCR have FDIC-insured deposits BUT the large, private lenders that have thrived in DSCR over the last few years are not FDIC-insured lenders). 

1031 Exchange paid in cash, no mortgage.