Non-QM loans allow you to qualify based on other alternatives instead of the traditional DTI method ((DSCR for example when the monthly rents > monthly PITI (principal, interest, taxes, insurance) = you qualify)).

From a PM standpoint renting by the room is going to be quite a bit more work than renting traditional apartments.

I would run the numbers compared to a more traditional hard money loan (a couple of points and a little less leverage) to compare, you may be surprised that you might end up paying more even though there are no points

@Kyle Jones the traditional routes, or "conventional" routes, are the ways that we want to go.

The latter being a tradition investment loan regardless of short or long term rental. 

Basically I would have a traditional loan for the remaining amount after five years.

You’ll find a portfolio lender that can do more than traditional lenders and FHA.There are options like 5-10% down but you’ll be 1 point higher.

I would hope to utilize this to generate some capital to move into more traditional buy and hold rentals.Does anyone have any experience with this strategy?

I could have received traditional bank financing but decided the terms offered were good even though a bank would have offered a lower interest rate.

I finally got my parents on deck to support my real estate journey rather then the traditional college route.