The tenants should in most cases have higher credit scores and more to lose if they were to not fulfill their obligations outlined in the lease.

As an active flipper and wholesaler I would recommend you focus on finding off-market deals and using a shorter personal contract that clearly outlines your right to assign the contract.

Make sure it outlines what will/and wont be covered under "Water Damage".

If you're avoiding that for some reason then it would be outlined in the operating agreement.

Here are the numbers:30 year loan at 5.125%Purchase price: $79,000Down payment: $15,800 - (20%)Charges and reserves: $11,554  (outlined below)1) Closing costsOrigination fee: $1,235Discount points: $1,027Appraisal: $785Credit Report: $45Flood cert: $8Tax Service fees: $82.502) Title ChargesClosing Fee: $450Lender Title insurance: $279.80Title search: $2003) PrepaidsHazard Insurance premium $1,2004) Prepaid ReservesHazard Insurance $1,300 Property Taxes $1,833Escrow Adjustment ($200)5) Transfer chargesRecording Fees $230Transfer Taxes $2,3706) Settlement chargesOwner Title Insurance $349

The escrow instructions outline what to do if both parties perform or default.  

@Nalo Coban Did you end up closing on this deal with the financing arrangement you outlined above?

You can also take out lines of credit on your current investments in order to reach the down payment on your next properties.

The biggest reason they don't allow the scenario outlined is they don't want you living in the property.They are doing nonQM loans which fail if you owner-occupy the property.

There has been a lot of discussion about interest rates recently and a general lack of knowledge about what is driving mortgage rates to go up so I wanted to make a post outlining the reasons why mortgage rates have continued rising and will continue to rise until inflation decreases to about 6% (reduced from the current trend of 12.7% in April).