The lender wants to know worst case there will be enough cash flow to make debt service if you can't fully lease up the project right away.Usually a buyer ties up the land for 6 to 9 months before purchasing to see if they can get their project approved and advance commitments from some tenants for the spaces before closing on it.

Net Operating Income2nd is cash on cash3rd is cash on cash + principal from debt service

They'll be investing that money at the same time, so they make a worst case assumption on what they think they can make in the debt markets.

While cashflow is my ultimate goal, I may need to do a few flips in order to restore capital and pay down debt (BRRR likely won't work on this first property, at least not for another year+)@David Clinton III Next time I'm in town I'd love to pick your brain and see what value I can drive to your portfolio. 

Not to hijack this thread, but I wanted to ask how a deed in lieu of foreclosure would work in a non judicial state.If borrower agreed to this would the lender be able to get possession of the property back quicker than a mortgage that did not have this provision?

We are all fluent in Spanish, and know that immigrants tend to work hard to repay debts, including rent.

This way your equity even is giving you a return.Once your portfolio reaches critical mass, or you hit your target numbers or cash flow you can transition over to paying down debt to prepare for the final distribution phase.However, people need to retire, or go full time, at some point this is called your distribution phase, so when that time comes be sure the properties are paid off by that time to maximize cash flow in retirement.A great book on this topic and more is Gary Keller's The Millionaire Real Estate Investor.

I was curious, if you have say an auto loan or maybe some debt in a credit cards.

I have no debt and am patient and disciplined with my assets...So, I'm open to ideas and connections about how to mix and match real estate buying/investing in those areas with a possible career switch into some kind of real estate W2 income. 

I'm moving back to the states soon with my family and we're planning on investing in real estate in the near future, including possibly house hacking.We have no debts and have some money saved as well as a bit of inheritance.