My recommendation is to speak with a loan officer that understands both products in detail - not many loan officers will be fluent in both of these products so get recommendations and read reviews.  

You can see how it would be very easy to get into negative cash flow in the lenders eyes after takin off 25% of your rental income, especially in LA.

It will never be worth holding as a income investment and will soon be into negative cash flow.

However, I do have several family members who live on the West side and constantly complain about crime, the quality of the school districts, and other negative factors of their neighborhoods.

It will have negative cash flow no matter how you look at it.

Then I would say this is constructive receipt and you should report it as income.However, if the transaction is something more negative and the borrower is not doing good and doesn't have the $110,000 to pay you and you are extending him additional time/credit in hopes of him turning things around - then yes I would argue that you wouldn't report income in this case.

I cannot tell you how awesome it is to have a guy like you on here keeping us oblivious (no offense to you Marc, I speak for myself here!)

I speak from experience as that is how I started and it was a great strategy for me.

So I have a negative cashflow.

I had been speaking with a rep there and just found out today they lend on the LOWER of purchase+rehab or appraised value.