My income doesn’t show itself as being very high, but I have a relatively large amount of cash to put down.

There are several different types of income in the US tax code.Two main types are “active income” and “passive income".Active income is money you earn from working, such as wages from a W-2 job or income from running a business.Passive income is money you earn from investments like real estate, stocks, or rental income from your RE portfolio where you earn $ without actively working.Normally, you can't use passive losses (like losses from real estate investments) to offset active income like your salary from a W-2 job.That is unless you are an RE Pro.The reality is, that Real Estate Pro status is just a filing status similar to filing married or jointly.And if you are a real estate professional you CAN use passive real estate losses to offset active income from other sources.To qualify as an RE Pro you must:1.

Quote from @Raghavendra Jakkani: The tenant should provide proof of income that doesn't require detective work.

Applicants have a prior eviction years due to unfortunate circumstance but good household income and noted they are in a better place financially.

But the trick is they claim very little income or never file taxes at all .

--> Passive income doesnt mean tax free income.

The rental income from the first home will pay for the mortgage/monthly costs.  

But with that one lender I found I am not lendable due to not having proof of income for the last two years.

The net rental income should be about 65% more than the mortgage. 

Specifically:Will the lender only consider the rental income from the two legally zoned units, even though all three rental incomes are declared on your tax return?