full doc loan.  1 point and 7.475%. 

In a situation like this, does it make sense to pay off the final rental, or is this a really bad idea?

My wife and I bought our first house 4 years ago using the VA loan and I’d specifically like to learn how to finance a rental property using little or no money of my own.

They have some really exceptional high loan amount investor loans worth considering.

I am a regular lender doing FHA, VA and Conv, but I also loan my own money privately, and pool money from other investors when I don't want to loan my own money.  

What is your favorite/most excellent Loan Servicing Software to run your private lending business?

Construction loan.

@Patrick Irish based on what you say, the Sec 121 Exclusion and the 1031 Exchange both seem like they'd be good options for you to defer capital gains on sale of the townhouse.Sec 121 Exclusion has 3 requirements: First, Determine whether any of the automatic disqualifications apply (acquired property through 1031 exchange in last 5 years, or subject to Expat taxes)Next, meet the ownership requirement -> you owned the home for at least 24 months (2 years) out of the last 5 years leading up to the date of sale (date of the closing)Finally, meet the residence requirement -> owned the home and used it as your residence for at least 24 months (or 730 days) of the previous 5 yearsThere is no “Wiggle Room” but there is a Sec 121 “partial exclusion” for people like you that missed the residence requirement by a few months.

For the past five years, I have been providing private loans to a builder for new construction projects.

Zip code 27801 has, according to this article Where N.C. mortgage holders are underwater on their home loans, a state-high 10.9% of home loans considered "seriously underwater", Q1 2024.