It's a company overlay, meaning it's a specific lending requirement to that mortgage company. 

Hey, as an owner occupant no big deal, I would of had a mortgage/rent payment anyway..

:)Regarding my expectations from property management companies - I read on our sites that there are companies that do almost anythingThey have "property manager, a handyman, real estate agent, etc.".You need to come with description of what you are looking - let's say duplex and probably more details about the budget for the house, rehab and so on..After giving those details, the companies search for assets, offer it to you, you do your calculations and actually negotiate through themThey will handle the tenants, the mortgage, lawyer, fix issues - But all things should go through meThe problem  - knowing what is a reasonable price for them to manage my property and to trust them : )

Was the mortgage discharged? 

I want to investigate the HML route before considering a conventional mortgage. 

What happens if the seller doesn't make the payments and starts to default on the mortgage?  

The 2 mortgages are affecting his credit and he wants to unload the first house.In all my researching of wholesaling I've yet to find out how a tenant affects the transaction.

Example, home value is 100k with 50k on the mortgage.

I'm s successful investor and have several properties paid off and a few mortgages.

To determine the cap rate 1) Calculate the yearly gross income which in your case is $68,520.00 check the books make sure rent roll shows the rents are as stated.2) Subtract the operating Expenses not to include mortgage and interest =$28,936.803) Net Income = $68,520-28,936.80 = $39,583.204) Cap rate = Net Income divided by purchase price $39,583.20/400,000= 9.8958%Investors usually will use cap rates to compare properties in a neighborhood.