Even better would be to build up your reserves and hard money relationships and sell via mls after closing.  

I'm located in South Carolina and will typically allow the tenant to prepay rent in cases where they are in job transitions or they are retired and do not have a regular salary coming in but may have substantial cash in reserves.  

Factor in longer vacancy rates (and have adequate reserves) and negotiate good deals.

I think you would be further ahead by using money from anywhere else you can, and have the IRA be part of your reserves- the bank want to see that you have 6 months PITI on any and all loans you have, they will count the money in the IRA (less the tax and penalty) but at least you don't have to use it.We have tightened our belts and are putting everything possible toward another purchase.  

Even no money down you need reserves and money for due diligence to close the deal.I just think a lot of it is "pie in the sky" and wishful thinking.

Also, if you don't have a job here it's going to be hard getting approved unless you can demonstrate 6 months reserves or more.

I would go fro the longer mortgage and use the money saved as a cash reserve.

Although I'm not putting money down I have about $10,000 in reserve cash, access to credit cards, and equity in my primary residence. 

Since you have rentals DU (desktop Underwriter) will ask for reserves for each of those investment homes.

Gross Potential Income $132,000 - Vacancy ($10,560) 8% - Concessions, Loss to Lease, Bad Debt $0 Effective Gross Income $121,440 Other Income (Laundry) $2,500 Total Net Income $123,940 EXPENSES Real Estate Taxes $12,500 Insurance $0 Contract Services $2,190 Trash Removal $0 Electric $0 Gas $0 Water and Sewer OR All Utilities $37,500 Legal $1,000 Management Fee 8.00% $9,915 Repairs and Maintenance  $7,500 General/Admin $1,100 Payroll $0 Other $500 Deposit to Replacement Reserve $3,000 Total Expenses $75,205 Net Operating Income (NOI) $48,735 Debt Service Principal $7,384 Interest $24,857 Total Debt Service $32,242 Total Distributions to Members $16,493 Member Contribution $234,163 ROE 7.044% Member Cash on Cash Return 7.04%