That can happen for a few reasons: you can rent out the room you were living in for more rental income and can rehab some things while you live in it.

If they are good income earners with good credit, they are more likely to pay to protect their credit score.

I can guarantee you that virtually every KT system out there has been altered and without a permit because it would never be issued.

Understood but you may want to consider the income you are missing out without rehabbing the apartments.

For the purpose of just understanding the napkin math I provided above it would be the following assuming an IR of 7% and the RF of 1.458%:PP X (IR+RF)= Int and Principal PMT1.69M x (8.458%)= $142,940DSCR= 1.25 (To Ensure your Debt is Serviced by Your Income)$142.940 x 1.25 = Min NOI of $175,675Now I am not saying this is not a good deal, but if you were planning on ONLY borrowing at market rates from the bank, it would clearly not work so thats what the quick math would tell you.

Before getting under contract and offering the asking price, the seller and her agent were telling me that certain repairs were about to be performed, repair of decks and replacement of back side of the roof.

Projected rental income is around $2,850-$2,950, with current PITI at $2,277.

No one enters any of these fields to make an average income . 

I've got lots of rental data and info on income properties in the area.

DSCR stands for Debt Service Coverage Ratio - basically it means that the income of the property is what qualifies the loan.