It seems like there are some pretty good benefits on the procurement side if you go owner occupied such as being able to bid before investors, qualifying for FHA loans. and using the rents as income on the qualification.

You could rent your existing free and clear prop for 6 months and then use that income to qualify for a cash out refi at 30 years fixed.Good luck!

If you can qualify for 30yr resi mortgages that is going to be the cheapest money you will ever get.

I hate being a landlord, need some cash up front, but want to look longer term than wholesaling or flipping.My question is, would it be better to offer this property to a df qualified person via a 3 or 5 lease option or with seller finance and a 3/5 year balloon, with dad and me being 'the bank'?

Hi Mark, The payoff of a seller's note 3 years later is not considered to be a sale of real estate but merely a payoff of an outstanding debt, so it would not qualify for 1031 Exchange treatment at the end of 3 years. 

If you called your mortgage company and told them that story would they give you a late grace period.

If they don't have the 10k they are unlikely to qualify for financing at a traditional bank.

You need a good score to qualify for a mortgage.

On the one hand managing 5  or 6 properties is the sweet spot for being able to qualify for all things residential and is easily doable for a busy person; on the other hand it is becoming tougher because you don't have the benefits of scale where the income becomes more significant and helps you through a vacancy or 2.

Hi Angel, It sounds like this property has been your primary residence for the last four (4) years, so you will qualify for the 121 Exclusion (not 121 Exchange).