We are incentivized to believe that real estate prices and activity will only go up from here no matter what, so we manipulate data and our narratives to reflect that. 

$1.4k is the reflection of renting a unit that likely cannot legally be rented

This is the manual input in your underwriting model that reflects the percentage increase your rents will grow each year.Unusually high organic rent growth inputs can be dangerous because it has a compounding effect.Organic rent growth has a compounding effect in your underwriting model.

They want a tax return that shows an accurate reflection of your income so, if your tax return shows a small net profit or, a profit too small to qualify for a loan, that's either your actual income or, you lied to the IRS.

All figures are generated for illustration purposes only and do not reflect actual figures of any of our current/past transactions.Questions:1-If our debt package requires 3 months of prepaid P&I ($15,000), should we increase our Sources & Uses schedule to account for this figure, or do we anticipate the property to perform & simply borrow funds short-term from ourselves or 3rd party credit until operating incomes can pay back the short-term loan?

For the record, this post isn't intended to reflect negatively on the bank whatsoever.  

Secondly, does profit for each party reflect their initial investment?

I told tardus I won't commit to then for at least a week so I could reflect and determine if this is the best course of action.

Taxes and insurance have not gone up, but if they do, rent would reflect that.

Owning directly, owning in a Single Member LLC in any state, owning multiple single member LLCs, owning layers of LLCS....in all of those cases, the tax results just flow straight to your personal tax return and are reflected there.