So now my holding were a house I purchased for $55,000 with an 11% interest $45,000 loan against it, and a lot I purchased for 18,500, with a $50,000 loan at 7% interest against it.  

They buyer then goes to get a loan from the bank, and in the course of due diligence the bank finds out that one of the sellers has a tax lien judgement against them for $320k ( the property is selling for $130k ).

The loan was at 4% so the cash flow was solid, the only issue is we have more money stuck in it than we would like.

I don’t know if any other loan types exist that are going to be DTI friendly. 

The mortgage being foreclosed is a senior loan.

Tax Benefits Once Built- Deduct depreciation and cost of maintaining the property - Deduct mortgage interest if a loan is taken out

Monday comes and I kept emailing and calling all parties no response finally Tuesday the property manager response and says even though we didn't respond the tree should had not been touched.

thats what we call a cream puff loan  I assume they are putting 200k in cash down ??

For the acquisition I used my own funds, and for the rest I was able to secure a construction loan with the folks at BackFlip.

Putting all this action into a partnership tax return reduces the risk right back down to an acceptable amount.Second, with a partnership tax return, we can mechanically show your capital contribution (at-risk money) including recourse loan debt.