Sandy,My in-laws just finished major renovations to their home in West Cape May and have met with many of the local contractors. 

I am very tight with my Banker of 24 years.. and when we do social things together we get to chatting.. they wont even look at someone with no experience .. unless they are a VERY high paid W 2 or business owner that is going to drop a million or so in their bank and they do it for the on going relationship.. and its gotten no eaiser.now to be fair out in the mid west and deep south tons of smaller banks that are more apt to lend on small balance rentals. our west coast banks would not even look at them .. they will only do MF and larger.. they have no interest in loans on SFR rentals.. one because frankly we don't have many .. price of SFR's make renting them out not all the great.. and they let that business go to the national Federally backed loans.. small community banks don't lend  those types of money.. its their money. 

I suspect those that are asking for partners are taking a larger % and they probably should .. but if its just dollar for dollar I don't see the reason to do that.. but that just me.

My question is with the tenants being month to month, can I just buy the property, not renew either leases and then renovate the property and convert it to a 4 plex while I’m living in it allowing me to qualify for an FHA loan? 

The house needs to be completely renovated.

At the moment my goal this year has been to pay down as much debt as possible and acquire larger rental properties.

Because of interest rates you could end up losing money on the deal if you go over your renovation budget or if it takes longer than planned to renovate or sell it.

How much would you all calculate into the renovation of a rental that wouldn't go for anymore than $700/month and wouldn't sale for anything more than $40,000.

In about 2 years I’ll buy in a third market which will be Little Rock.On top of the taxes you also get hail damage a lot which makes your insurance higher.I can buy a newly renovated home in Little Rock for 70k.

Real life example: $18,435 debt service (includes mortgage, taxes, ins) and $32,355 net operating income would leave a DCR of 1.75 Cap Rate is Net Operating Income divided by Purchase PriceCap Rate can be great for looking at larger multifamily buildings with sophisticated buyers/brokers.