@Gregorio MartinezSingles and 2-4 unit multi family are normally appraised by comps.. how much you owe and market value are irrelevant.

The question of how low is too low is simple whether you are flipping a car, a house, or anything of value. 

You’ll need to deal with normal residential underwriting.

Cars stop, people knock on the door, that thing has given me about 4 leads a day average.

But you have to replace all the support bars, and that may not make economical sense for you if just redoing the sheetrock doesn't make sense.My experience has been that if you're going to hold on to the property it usually makes the most sense to just bite the bullet on the front end and restore it to a normal sheetrock ceiling.

Otherwise just a normal corporation.

Normally, I would absolutely run away from this deal because of the negative cash flow, but I foresee the Austin market continuing to boom and I could potentially raise the rental rates over time and generate positive cash flow.

If the difference between a HML and normal mortgage is an oven, it'll make more sense to toss an oven in than to take out a HML.

Account ClosedIncome taxes are normally not calculated in cash-on-cash return calculations because everyone's tax situation is different.For sake of comparison - the cash-on-cash return should be comparable on a level playing field.Person A - $100 return on a $1000 investment.

Only reason why I see it as a waste, is that you can essentially do the same job as the guy you are giving the money to and normally get a higher return (if you know what you are doing).