Your friend doesn't have the knowledge or skills, so I highly recommend he hire an attorney.Since the tenants claim they never received notice, that means they never received the offer of free rent for December and January!

That is where my husband and I got started AND we "house hacked" which is your strategy :) highly recommend - it's served us well. 

I would highly recommend changing to a different lender right away.  

You would need to find a non-appreciating market where rents are high in comparison to home prices to at least get a 2% rule, even though you will probably break even or have negative cash flow due to interest rates.

Pretty respectable source’s research “found that short-term rentals are not the biggest contributor to high rents, especially when it comes to the most vulnerable segments of a city’s residents.”https://hbr.org/2024/02/what-does-banning-short-term-rentals...

DSCR loans are typically best with 6 months seasoning, but there are options for 2 options for 3 months or even no seasoning: 1) to where you can get your costs out (purchase + renovation) as long as that number is at or under 75%, but if any other forced appreciation has happened you are limited to the max of your costs in or 75% of market (which ever is lower) OR 2) no seasoning DSCR loans which candidly come with pretty high points that make them MUCH less appealing. 

If they aren't digging down the basemen $120k is too high.

I highly recommmend checking it out!

Ideally, you're someone who appreciates the value of real estate as an investment vehicle and is looking for hands-on expertise to maximize the return on your investment.Our Goal:Together, we will target properties with high upside potential, focusing on strategic acquisitions that can be quickly turned around for profit.

Existing operators have long established reputations and positive feedback earning high ratings and allowing them to top the Airbnb and VRBO websites7.