It was built in the 60s but just got a new roof, HVAC and water heaters were all updated between 2017-2018 so fairly new, and it’s an active mid-term rental making about $3,200-3,600/month depending on the season and he provided all the documents to support that from the past 1.5 years.

DSCR options would be best as local banks require higher FICOs most of the time but each bank has different UW guidelines.

The market tanked, the values declined, and some of the properties were under water even at 50% LTV. 

Once you get above a SF, the properties aren't usually submetered for water.

These are the affordable rentals D- In my opinion, D houses require rehab just to be livable.

Cashflow on top of that would be ideal, but I guess technically not required.

When I was working in local government I once filled in a guy's yard with concrete that kept digging up our water line and stealing water.

Dee - As a newer investor, some of the options using "Agency Debt" (aka Fannie and Freddie financing) may not be available to you as they require 2+ years experience in multifamily space.

Required distros for tax consequence.At the same time I kinda snicker a bit since the buyer... the investor... thinks they found the next Apple or Tesla investment (and they are clearly the smartest in the room), and then go off the rails when it all goes south, I can't help but shake my head and have a small giggle.A fool and their money soon go separate ways, Yes, but don't you wonder how they got together in the first place?

Most lenders have seasoning requirements, so you would need to own the property for 12 months to obtain a loan based on appraisal rather than lower of appraisal or purchase price.The longer the period of since property purchase the more likely an appraisal higher than purchase price.The exception may be a "hot" market where prices are moving up sharply almost every day.