Self employed here, average $3k for prep and pay 37% effective tax rate.

Compare/contrast 65% v 70% LTV terms to see if that last 5% is really important to him."

Then the debts are "Omitted".This is usually more beneficial for a person who receives W2 income from an employer and wants to exclude their W2 income from being hit by the credit cards, automobiles or mortgages being paid out of their business checking account.There are also ways to gross up some of the income but some lenders have overlays and hit you with things rather than allowing add backs.

I might pursue the tenant if they have solid employment. 

Today we invest 100% into Roth contributions so there is no tax benefits to diverting the funds I would just be giving up the $7K a year employer match.

Compare, contrast, and then define your own policies utilizing common sense.You must proactively defend your decisions.

(Most probably do FAR worse...)By contrast, private lenders are currently earning about 12% annualized interest on their money.And, getting exactly ZERO calls at 2am from unhappy tenants!

You don't necessarily need a w2 for active income it can also be anything else like self employment works too you just have to wait one year of tax returns but run your business for at least to years to use it and make sure you don't write off too much as you want to be able to use the income to qualify for a mortgage.

Other times, capital is tied up (like 1031 funds or from a previous sale or expected bonus, or timing for w2 to season or 1099 self employed to season..) for a few months.

Manchester and its neighborhoods feel more alive, and have great niches, and local employment.