I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

I don’t know if Patrick was completely duped by Robert as well, but I do know that when I make inquiries, Patrick directs me straight to REM and doesn’t address the issues himself.Patrick seems to be a very intelligent guy and, honestly, I still occasionally listen to his educational content, but I will never invest with him again. is he licensed series 7 so he can legally take fees or was he a principal or employee so he could legally take fees ? 

Installment Payments: The buyer makes regular payments to the seller, which include both principal and interest.

Can I use rate and term refinance to pay off my hard money principal (including rehab portion) until the 12 month seasoning period until I can cash out?

This way, maintenance, repairs, and taxes are the responsibility of the new owner, while you continue to collect principal and interest, potentially as tax-free income.I'm not a CPA, just a heads-up 😄, but you could possibly avoid capital gains tax with this approach.

What might be the drawbacks?

.); the larger drawbacks of course are lost investment gains in the plan and potentially needing to repay the loan balance in full if circumstances change, among others.

Long term buy and holds are typically more suited as a principal investment strategy and perhaps a Joint Venture. 

The seller will still be responsible for paying taxes on the interest income they receive, and when the principal is eventually paid, there may be tax implications for both parties, depending on how the deal is structured.

As you mentioned, the main drawback is the inability to continue 1031 exchanges after converting to a REIT.