You mentioned numerous times that you like the property and since you plan on living it one of the units you have a lot more emotional involvement in this than you should.Figure out what kind of offer will make the numbers work for you. 

Since I can't offer any insight into the pros and cons of investing in those kinds of "2% rule" areas besides what's already been covered in numerous other threads, I won't try.

In addition to the expenses you mentioned, (mortgage, vacancy, repairs) consider:Property taxesRental income tax (if applicable in your area)Utility bills (unless tenant pays)Property management (unless you'll do it yourself)HOA fees Advertising (when vacant)Best of luck to you!

It might also have an application for a  land trust format that might be useful.What ever you do, run it by a lawyer.

Also verify that the address on the credit report line up with the address on their application.

This is the lowest level of mortgage applications since 2000, or 14 years ago. 

I can think of two scenerios that could be problematic.You started a thread asking advice on strategy on a potential deal and you mentioned your bottom line and tour buyer/seller or their agent happened to see your post.You post about a situation about a tenant, or an applicant, and in reading your post they know you are not going to renew their lease or you might be evicting them, hence escalating the problem.

There are numerous home in the area that are section 8 rental properties.  

And because if someone wants to leave early there isn't to much you can do about it anyway when they use the security deposit as last months rent no matter how many times you have in the contract that they can't do that.I wound up with a non-rule following tenant, we a no cat policy, this was clearly communicated and the applicant even said,"I don't even like cats" but then she is cat-sitting all the time with the excuse she doesn't own the cat even though our lease says "NO OTHER ANIMALS FOR ANY PERIOD OF TIME".

Thanks, Larry,I am looking for the business plan template for a loan application.