We would like to combine the bathroom and middle room to create a bigger bathroom and 1 closet for each of the front and back bedrooms.

My standard underwriting is 15% combined for Repairs and CapEx, @Scott Benson.

Combined their gross income is 3.6x rent. 1 great credit score (mid-lower 700), 1 mid (Mid 600 no credit history), 1 bad credit score (mid 500, balances owing on closed accts but no collections no open accounts.)

The lender said they would combine the 2 currently mortgaged properties into 1 loan.

Maybe you can combine that with a live-in BRRRR where you create some value and get to that 20% much sooner. 

.$120,000 purchase price with a conservative $250,00 ARVRoughly $60,000 in renovation Conservative rent $1800 monthI’ve got roughly $200k in capital(HELOC/Savings combined)With the current situation in our world it’s nerve wracking obviously, thanks in advance for the advise.

Suggestions:1) get good rental property insurance that covers loss of rents for covered reasons: fires, etc; 2) be a good landlord and treat your tenants as customers you will reduce liabilities with an ounce of prevention; 3) Get umbrella insurance which also helps to covers your assets in a suit; 4) IF you get an LLC you must run it as a separate business or it will not provide you any protection (I'm not an attorney, but that's my understanding); meaning if you combine your business funds with your personal funds, they will be able to demonstrate it behaves as a straw company and really the courts should ignore it as a separate legal entity (my understanding of the risks).  5) LLCs can make lending/borrowing more difficult, until you want to borrow non-conforming loan funds (non-Freddie/Fannie) or you hit your 10-15 property limits with Freddie/Fannie, at which time you'll need to go to commercial lenders who will WANT the property/loan to be in an LLC.  6) As you grow your portfolio keep in mind conventional lenders will look at your DTI (debt to income) ratios. 

The 3x income requirement is usually combined, not per person, and it sounds like they have no problem meeting that requirement together.Also, I don’t personally put too much emphasis on applicant’s credit scores for a variety of reasons that I won’t bore you with.

So all those things combined with everything else I mentioned is my sweat equity in this transaction.The hitch to this all is that she will not accept a deal where someone refinances the property because she doesnt want a lump sum.

If I buy 6 more rentals (available loans I have currently after selling some off) and sit on the properties for say 7-10  years, I project between principal pay down and cash flow after increasing rents over that decade will be $1,500 a month combined per each of those 6 properties...9K a month just for THOSE new purchases.