Additionally, don’t overlook Memphis, which has great potential for rental investments as well.

@Brooke Carlton I found a potential solution to this problem!

Keep track of 3 buckets.1) Owner occupied portion - potential deductions for schedule A2) Tenant occupied portion - potential deductions for schedule E3) Jointly occupied portion - likely prorated for both schedules.There are nuances to this, so I recommend looking for a tax pro who can coach you on this. 

I am interested in this given the potential for big equity.

Learn about the Net Operating Income (NOI) and Capitalization Rate (Cap Rate)—these are essential to analyzing the potential profitability of a property.Return on Investment (ROI): There are different ways to calculate ROI in real estate, such as looking at your total return after a sale or assessing your rental income versus initial investment.

And What other conditions/terms/costs do you calculate when underwriting the potential of a deal?

If you currently rent for $2,500 and take the $1,750; you have additional positive cash flow of $750 for your rent situation.Have you thoroughly looked over the capex potential issues? 

The seller said this is in a gentrified area so there's potential to rehab this effectively and get a high payout as shown in the last comp.

OR potentially a lease to own option.

In efforts to get more experience with IOS, we are seeking a financial partner that potentially has experience with this asset class.