That is because of the financing available with the owner occupied loans with the longer (30 year) fixed rate debt.

If you need to access equity for a second investment property, a HELOC would be a better option.Currently, many investors in long-term loans are seeing reduced cash flow due to high rates, taxes, and insurance.

I have very little equity in it and my loan balance is around $400k. 

I  know that there are certain stipulations that come with the grant and I want to use  FHA  loans to keep my down payments low.

He has the proof of funds and I know why he is not going to get a conventional loan.

The loan officer came back with questions that I need advice with.

This affords the opportunity for a homeowner to sell the property if it is not under water for market value and pay off the loan before they are foreclosed upon, or more commonly, short sale the property with the bank's approval. 

If the windows were installed incorrectly (which we all know happens) then you could get water creating mold in the building or they could fall out on somebody if not properly affixed.  

Let’s assume the property has $313,000 in NOI Valued at 6.26 M 5% cap loan $4,695,000P+I annual= $413,400> NOI5.216M 6% cap loan $3,912,000P+I annual= 344,460 > NOI4.47M 7% cap loan $3,352,500P+I annual= $294,708 <NOI cash flow +

You will need to investigate on the property market before you can identify specific locations which have higher value gain through pricing and also renting.Explore different financing options according to your financial situation, such as FHA loans or renovation loans, based on your investment objectives.