I think the actual NOI and downside risk factors are far more vital to underwriting than anyone's gut feelings about overpaying or underpaying. 

@Nasir Smith- thanks ...the VA loan is the best  propgram that allows   zeero down ...its  also  noce that it  doesnt  requires any monthly mortgage insurance ...a  downside to the VA loan is the VA funding fee  which  can be rolled into the loan  or  avoided if  vet is diabled   2) YOU CAN  REQUEST A LARGE  CREDIT  FROM SELLER ( or agents) THAt can be used to " buy down " the rate  and make the payment more afforable 3) rent out part of the house is an option too 

.), however when that [property is mixed in with others within the tape, the average value, income, etc. makes sense.The downside to a loan tape of 2+ properties: If you choose to sell or payoff one of the properties within the tape, the lender might require what is referred to as a "turbo paydown".

Another downside - I lose my leverage to borrow against the equity in those homes after sold/wrapped.

@John Richter- thanks - another down side to PM is1)  the loan to values allowed tend to be lower than what a traditional lender may offer   2) many PM  lenders are not willing to  do  cash out refinances and  onlyl interested in  straight refinances and also purchase loans 3) many PM loans  are not  30 yr fixed loans 

Here's the downside though.

I think as long as you can be flexible with a LTR that still cash flows as opposed to counting on STR, the upside should be pretty attractive and downside risk fairly minimal. 

Is there any significant down side with having a loan modification of extending the loan to a 40 year @ 4.25% vs 30 year with same interest rate? 

The only downside is it doesn't have all the supporting information.I think I'll just eat the cost and use the CAR lease.

2) What are the downsides to consider when starting off with a unit as opposed to a multi-family?