Also, it is a new build, so maintenance is going to be minimal Rent Numbers:I can rent the house out for 2800/month conservatively (maybe 3k)Loan Details: mortgage remaining: 310,000FHA matures 10/1/2050rate:2.75%asking price:590,000

It may limit the amount of lenders ability to help you find the product.

The lender explained that the standard carve-outs include committing criminal activities on the property, failing to pay property tax and failing to purchase insurance for the property.

The home is only worth about 85K so I’ve had a hard time finding a lender willing to work with smaller loans or smaller appraisal values.

@River Sava, I thought about the Cash-out refinance option, but it does not make sense for the one property I want to pull equity from since I have a 3.75% on the primary mortgage. 

Property taxes, Insurance, Utilities, Mortgage payments, sometimes you may also pay a vendor directly, etcYou should be giving to your CPA the form 1099, Year to date PM Statement, form 1098 along with expenses that you paid for directly outside of the PM Company.Best of luck

@Chloe Hohmanunfortunately, since they have a mortgage, you won't be able to do seller finance.but let's step back.do you want to live in this townhouse? 

Also as the tenant helps pay the mortgage down after a few years you can use heloc etc and buy more properties to scale or sell it off

This provides a steady income stream with minimal risk.Appreciation Potential-The property has appreciated significantly since purchase, and you could continue to benefit from further appreciation in the future.Minimal Hassle-You're already familiar with the property, and since it's paid off, you don't have mortgage payments or associated risks.Cons:Limited Portfolio Growth-Keeping the property means your investment portfolio remains concentrated in one property.

I assume you are referring to refinance, loan modification, assumption of mortgage, mortgage assignments, etc.