Federal loan interest rates currently sit at 3.73%, roughly the same rate as a 30-year mortgage, but is 0% until May 2022.Some factors I've considered that make this taking this $4,000 attractive:- I may be able to obtain lower interest rates with a larger down payment, offsetting student debt interest- Avoiding PMI by making a down payment over 20%- Booming housing market in my city with consistently increasing equity- Living several years in the home leaving time to grow equity, potentially making much more than I owe in student debt While all this may be legal, my biggest question is this - does this sound like a smart investment strategy?

But the rehab process takes me about 2-3 years to finish because i work Full time and only have weekends off to rehab. is this a good idea or am i wasting my time or is there a better alternative?

One follow-up question:  In terms of calculating the number of years of rental income it would take to "make up" for what you'd get if you took the alternate route to sell now and avoid capital gains.... does it make sense to say, for example's sake, we sell after the 2-out-of-5-year period and profit $280,000 ($700k sale price minus $420k purchase price), and at a 20% capital gains tax rate, we'd pay roughly $56,000 in taxes on the profit.

Alternatively, let's just say we bought it cash, would a bank not let me qualify for a loan based off the debt service coverage?  

If they can they will advertise that normally as it will attract potentially more buyers.

I have no experience with lots and new-builds, so I am making this post to get ahead of any "unknown unknowns" that may bite me in the rear.The key theme is that I'm open to comments, concerns, alternate suggestions and insights from those who have done something similar to my scenario.

That is an attractive building.

I'd say we have at least $360,000 in equity in it as I write this (based on estimates from Zillow, Redfin & realtor.com).While we're planning on increasing the rent for the next term if we keep the property, I'd like to learn how I could leverage this equity into substantially more monthly income with little to no out of pocket expense and no capital gains taxes.I have no experience with loans other than FHA or conventional on first or second homes, although I'm vaguely aware of alternative financing methods (asset loans, etc).Any advice on how to turn that equity into substantially more monthly income?

This is the least attractive option to me, but my girlfriend likes the idea of having a little bit more privacy and our own space. 

See them ahead of time by doing 1 above, and develop an alternative finance mechanism or strategy.4.