They have their own longstanding business and great credit, but have been denied loans from lenders recently due to  some debt on the business.This seems like a crazy situation, I'm trying to figure out if there is a way to profit here, but other than negotiating a shortsale i can't see it.  

I prefer 1st position notes but certainly understand how others like and do well with 2nds.Initially the concept was very foreign and I often thought 'wait, so I am buying someone elses debt and playing the role of the bank?"

At some point will you sell a few to make a lump sum to payoff some of the debt or will you hold and simply let tenants pay it all off over 20 or 30 years?

Separate electric meters.Asking:  24,900Needed repairs:  15kRent income:  M-850      A-10,200Taxes:  M-43.60      A-523.15Insurance:  M-45      A-540Vacancy:  42.50PM:  68Maint:  42.50Capex:  42.50Water:  75Total expenses:  M-359.10      A-4309.20Net cashflow:  M-490.90         A-5890.80Property appr rate:  2%Rent appr rate:  2%No debt service.  

The only problem that I ran into, is that I have a loan out for an investment property in Hawaii, and because of that our debt to income ratio was a little bit off.  

Moreover, consumer debt levels seem to be manageable.

If you are new, and the LLC does not have a proven cash flow, a lender will make you sign on the debt yourself.

You also need to be solvent and pay your debts. 

@Wynn Meyer So after Debt services, I would be looking at roughly putting $260/month to pay the mortgage.

It helps to understand the many ways investors calculate ROI and the definitions used such as capitalization rate, net operating income, debt service,  cash on cash return, etc.In your question you use very broad numbers.