Kristine Marie Poe  I have never, nor will I ever, make a loan to a home owner... all loans are rehab type loans.I agree with you...I had some pre DF owner carry back to homeowners on some of my OREO.. but I set those up on short term Zero interest notes.. and they have all but paid off..

We submitted  a preliminary offer at 700k with the seller carrying the financing. 

Typically auctions/tax sales carry a disclaimer that no guarantee of title is provided.

@Carrie GiordanoMy issue is with your agent.

As I understand it, the requirement by the lender for you to carry PMI is if you are borrowing more than 20% of the value of the property. 

This will let you factor 40% of the rent for maintenance, management, etc, etc, etc.Other ways to get into a property are to joint venture with others, find a property with seller carry back or seller financing.

But in the long term, I know being an Agent carries higher standards / TREC requirements?  

They collect the property on the note expiring, and now own the property.Most financing available today is going to be 75% to 80% LTV for commercial property. you're better off finding a property where the seller will carry back a portion of the purchase price, and then find financing that will allow that.The only way I see that working is on carefully calculated upside potential - ramp up in rents or occupancy; completing rehab, etc. it's just risky to me.

Do I take $15K of expenses now and carry the $7K operating loss forward to the next year?

These can offset your total deductions to have the rental property take care of the debt service and carry as much of it's own weight as possible, when it comes to your DTI.