Underwriting will assess the performance and appraisal of the property based on traditional long-term rental comps.

For a beginner investor, the choice between using maximum leverage or putting more cash upfront to build equity depends on several factors including risk tolerance, financial stability, and long-term investment goals. 

I've been interested in this type of investment and I'm guessing this is sort of different, since it's not secured by real estate which seems like the more traditional way to do it. 

Once you do this conversion it will be difficult to change it back to a traditional long-term rental. 

I'd recommend being very careful about how involved you get with college kids and the choices, decisions and responsibilities that they need to make for your property. 

Just be mindful the reverse exchanges tend to be more expensive than a traditional 1031 exchange.

Most of the guys I know of that are really doing a lot of work outside of traditional routes are so busy they don't have time to come around here and toot their horns. 

It's not a traditional bank underwriting approach.

It's not like people won't know that the property isn't in a flood zone; if they finance it through traditional financing then the lender would most likely require that they carry flood insurance. 

If it's just a laundry room, it's really tenant's choice.