However, there are ways to work through ant not get hit in terms of DTI qualifications. 

Hello, I´m in Northern Mexico. 

You can hit the ground running with a large cashflow 

So, you could set it up, fund it, but then decide not to use it, and you'd never get hit with the annual flat fee. 

Quote from @Nolan Ring: Today I reached out to 3 different lenders in Northern Idaho about FHA loans for small multifamily properties (2-4 units).

If you had 10 years left on the current note and the 5 year balloon hit. 

When I die, they can keep renting out the properties or move into the SFH, or take the step up basis and sell it with not as high of a capital gains tax hit (I hope they wouldn't choose the 3rd option).

That means with MFU, you can hit those discounts faster.

In the next 5 years, we can buy one property per year with 25% down (~100K), and perform the same operation of using cash-flow for paying off properties next 15 years and we will have $15K/month net-profit which hits our goal adjusted for inflation (assumed at 3%).

At a high level, this is generally the path people take - we see a lot of people have success in this route - start building the portfolio with banks, low down payments, and then **generally** when you hit around 5 or so properties - it starts to make sense to switch over to LLCs, its too hard to qualify/deal with paperwork of banks and switch towards private lenders like DSCR Loans - (LLC friendly, easier) to scale past 5 or so.