The only disadvantage would be that you would most likely not be able to get financing for this property, but if you have the cash to invest, it should work out very well for you. 

I prefer not to wait two years to provide tax returns.

Also I believe it’s priced lower due to the area, I’m not going to be living there so it doesn’t really matter I just think with potential rental income it might be worth it because I wouldn’t be getting a mortgage but buying out all cash.

Yet, I received terms 2 weeks ago, and CTC this week.Rate: 8.125%Processing Fee: $995Closing Fee: $1,360Origination Fee: 2.650% Admin Processing Fee: $995Is this bad considering it's a small cash out: ~60k?

The fact that your loft provides a means of egress should be acceptable. 

Also look at all the MF syndicators who are losing properties or having big cash calls did they all start out as frauds ? 

House hacking is an awesome strategy, if the numbers keep going up you will have built equity and cash flow when you move out of there.

I need to pull cash out of a property.  

Key factors include your experience level, credit score (600+), down payment (10-30%), property appraisal and ARV (65-70% of ARV), project scope and budget, exit strategy, cash reserves, market conditions, and lien position.

Providing necessary docs - 3-day, tenant ledger, lease, property management agreement if you have one.