That just seems like a lot of work/risk to get a lower return than you'd get putting that cash in a REIT ETF and calling it a day.I would run away and never look back if I were in the situation you posted.

Another thing: you probably shouldn't try to negotiate a seller down to one price, have them meet it, and then proceed to  negotiate an even lower price.

For example, if the market shows 96.5% occupancy for comps, underwrite it at a lower number, maybe 90% give or take a percentage point.

I started out with a lower income so it was super helpful that I had a super low DTI ratio.

So if you take that same property and are able to increase NOI (by lowering Operating Expenses or increasing rents) by $50,000, you have created $625,000 in value!

He called me up to discuss his problems with the lower unit.  

With the amount of homes we sell every year, occasionally we run across a situation where the appraised valued comes in much lower then the actual sale price.

A few tips:Prioritize the high interest payments and "snowball" to the lower interest. 

The loan is Tier 4 in terms of LTV & DSCR (lowered rates due to higher tier) and I've been offered rates of 4.33%, 4.58%, and 4.65% respectively.

Overall, I am considering lowering lot rents to $250/month to limit the net increase to only $15/month for now.