This is a strategy to hide what you have done, not a legal method of circumventing the clause.

That part does make some sense, especially since the first property we're looking at is out of state and it would cut back on legal fees to just file in that state. 

A few things I noticed (1) you didn't include gas in your expenses (2) management expense at 6% seems low - I've used companies <10% before and I paid for it (3) billing back utilities via RUBS (Ratio Utility Billing System) is a legal, extremely economical way to bill tenants their fair share on a master metered property, however, make sure your state statues support it and is fairly commonplace with your competition. 

You then have to direct the custodian to do something with your money in a legally allowed investment.

And to your last sentence, I'm not sure there is a workaround to avoid mortgage lending rules, especially if your loan is to a borrower who is also occupying the home (given how sensitive the CFPB is with owner-occupied loans).Sorry for the segue...https://www.nolo.com/legal-encyclopedia/whats-the-...

The expenditures included in the total acquisition cost must be fully documented by theborrower.When the installment land contract was executed more than 12 months before the date of theloan application, Fannie Mae will consider the mortgage loan to be a limited cash-out refinance.In this case, the LTV ratio for the mortgage loan must be determined by dividing the new loanamount by the appraised value of the property at the time the new mortgage loan is closed.

What documents do I need to to ask for on a multi-family property in order to "run the numbers?"

Has anyone had a seller unwilling to provide these documents before?

I have heard of many states where landlords cannot bill for their time. you should not do so without confirming that this is legal in your state.

You may need to provide documentation that it was in fact your cash into the deal.