Dropping the rents $100 a unit would still cash flow $200/door with the tenants paying utilities.Numbers at a glance:Gross Income- 22260Taxes- 2084Insurance- 1000Management- 2226Utilities- 9500NOI- 7450 assuming no vacancy or CAPEX (just to illustrate how bad the current numbers are)Debt Service- 6535 (30yr, 20% down, 5.5%)Annual Cash Flow- 915 (Actual for this year with my debt service is -4797 due to CAPEX and no vacancy).

GIGO......someone just didn’t put all the numbers in right.At a glance.....the renovations show as regular expenses, no rental income, etc.

I'm an hour or so south of your property, but am just a regular buy and hold DIY landlord. 

However, if you have an interest-only loan during the first two years, the debt service is lower, thus the cash flow is higher and could meet or exceed 8%.

While the HOA has a strong argument using this clause against you, I think you have an equally strong argument that the spirit of that clause was to stop owners from selling products or services out of the home, not to stop STR.

I'm just not sure if the bank/servicer are obliged to bid the market price minus the Net Value cost factor (15.95%) or the balance of the loan.

@Brook RiemanMy bad.Like @Jack Bobeck mentioned, the initial interest and principle will be spread like a regular 30 year note.The remainder of principle will be due at year 5.

And you may also be able to order it through your licensed servicer.

Realty Trac or foreclosures dot com all feature services that show you for 7 days properties in your area, as well as the equity in each deal. 

See which neighborhoods they buy in, get their criteria, and offer your services as a bird dog and/or wholesaler.