Each property qualifies on its own economic merits (i.e. rental income covering PITI payments)This is one of the main advantages for DSCR financing, i.e. the ability to scale without any kind of DTI limit imposed by conventional financing.

Now I can see some builders having an issue with comps.. but other than that its crazy to take these funds as income and then pay tax and plow it right back in.. 

The only two ways to rectify this are (1) purchase the property far below market price or (2) significantly increase the property net income usually through some method of “repositioning”. 

@Muhammad Kashif Flipping a property in 6–9 months results in short-term capital gains, taxed as ordinary income (up to 37% federally, plus NJ state taxes up to 10.75%).

If the rental income from your condo can comfortably cover your mortgage and leave you a little profit, moving out might make sense.

If they qualify as tenants, you might need to honor tenant rights or negotiate a settlement to vacate.Market Potential: A two-family home and a single-family unit could be a great income-generating property post-rehab or resolution.

Lenders want to see two years of stable income before they loan money to you.

Appreciation is a real thing and not only this the demand for quality low-income housing is real. 

@Victor Yang To use the rental losses to offset any active income (W2), you'd have meet Real Estate Professional status (which would be difficult to do with a W2 job because you'd have to work more on real estate than any other job to qualify) OR have an AGI of $150K or less.

Economic growth means higher household incomes, better employment rates, and stronger consumer confidence, all of which directly fuel demand for real estate.