I don't know how a loan for 535k was originally pulled because the property is currently worth 380k. tops.Because the loan has gone unpaid for so long there is a an additional debt collector who we must go through.

However, this foreclosure debt was 'hidden' in trustee's trust away from heirs and was not listed.

There are other FHA requirements concerning which you should contact your local lender, but determining whether or not a triplex or fourplex meets the self-sufficiency rule is a good place to start as this rule will immediately eliminate many properties from your search, especially in expensive markets like mine.

I have about $20k in student loan debt and have been throwing around the idea of putting it on the market in the spring in order to give me a clean slate financially speaking.

(I would if they want that as part of their loan package, but I would do my own pro-forma and check the calculator, making adjustment to entries for their calculator to provide similar results, you should always put your own pencil to your financing requests. )Be conservative with income projections, debt coverage ratios are a minimum of 120/125% and may be higher by location, type of project, experience and asset coverage. 

EFFECTIVE GROSS INCOME: $89,330EXPENSES:Property Management: 7.5% = $6,700Insurance: $5,112Maintenance: 12% = $10,720 (I will likely modify this number after inspection one I have a better idea of the actual shape of the property)Taxes: $8,568Trash: $1,085Water/Sewer/Common Elect: $6,910TOTAL EXPENSES: $39,094NOI: $50,236Cap Rate: 8.37%Debt Service: $33,672 (5 yr arm - 25 year am, 5.0%)Net Cash Flow Before Taxes: $16,564Cash on Cash (Assuming 20% down): 13.8%ROE (NCF + Princip paydown): 22.1%DCR: 1.49Debt Yield: 10.5%Using 50% Rule: $83.28/unit/month

I think it may be in your best interest to learn what they want: do they want their return based on debt, equity, mezzanine (the gap between loan and cost, but also a piece of equity possibly)?

There are a lot of debt investments available-  and the better platforms provide DD and streamline the process. 

@Carissa Grant The new mortgage would add to your debt.  

I spent all of everything I had on getting out of debt and obtaining all my education and licenses.