@Tom ServerI think that the 203k is not a good fit for your scenario because you are buying the property with cash and the 203k is a mortgage loan that includes the purchase price + the rehab costs.

For about $300 including delivery and removal of the old appliance, I can have a replacement used washer/dryer in place for a tenant in 0-3 days.

Is that just the origination fee or does that include other items?

While seller financing offers numerous advantages, including tax benefits and continued income for heirs, it seems he's set on selling for cash.

Looks I have to report net income on SE Line 24 ($2k), but on Line 25, I cannot claim losses due to higher income (>$150K).

I would put in writing a request for all communication from the property manager including the caseworker name for the tenant and name and phone number of your tenant (if you don't have) and start contacting them directly to find out what's going on if your PM company isn't being responsive.Good luck.

Even if I go to fight with the ridiculous report they still have it in their head it's worth $305k. 

Will use my lender Ryan Deasy at Capital Three Sixty who has already done (or in process of doing) 7 other loans for me including a 3 property portfolio refinance.

It’s part of a bigger process (including a will and docs for you if you need help) and you don’t want to miss a step, so don’t just google this one.  

Advani emphasizes the importance of market research, including analyzing historical data and predicting future trends, as a foundation for any investment decision.The Role of Property ManagementEffective property management is key to maintaining and increasing the value of real estate investments.