I have been searching online, but can’t find any law or regulation that explains this.

The lender saw there was an existing FHA case number on the property so we were able to use the same appraisal and we closed in 3 weeks. 

Lien priority is determined by state law and it is best to have the title reviewed by a professional to see what encumbrances may exist on the property. 

Are you trying to list the property for sale, buy existing property with income, or are you trying to buy the property and do a development deal on it?

As you are able to save more to set yourself up for a larger property, sell the existing portfolio and exchange into a larger deal. 

@Stone Teran  Here are a few ideas for your consideration (from a member of your target audience - an "Old Dawg"):Introduce a referral program for your existing tenants where they get a free months rent, restaurant gift cards, etc. for referred tenants who sign a one-year lease. 

I'll also be taking this property subject to the existing financing. 

You can then show experience in the REI industry since you both have investment properties, and have existing mature assets in the LLC.

I thought those revenue rulings you mentioned were superseded by more recent Treasury regulations (TD 9107). 

Are there any other strategies I might not have considered here, or am I just grasping for a deal here where one may not exist?