As a lot of others have mentioned, the multifamily has tightened up over the past couple years.  

A "negative cash flow" investment (that you'd likely be getting downtown) does not necessarily mean "bad", and a "positive cash flow" does not necessarily mean "good".Each property needs to be looked at on its own merits (and compared to similar sales nearby).Many hundreds of threads here on BP only give the specifics for a particular property, but with no mention at all about what other surrounding similar properties sold for.But Arthur, you won't do that, right?

According to income and liabilities mention above your DTI will be  high for new property in the range of $500k loan.

I would personally be a little leary of a lender who is trying to skirt around the requirements as it might make for difficulty in closing as @Jared Viernes mentioned. 

I'm having lunch with him again soon at his diner and can ask more questions, but would like to narrow it all down abit more and make the most of our time, mentioning the lease option.Answers to your questions:Q1: The 7 units are broken up into  four 1-bedrooms and three 2-bedrooms.Q2: Effective Gross Income was 34,374, less expenses at 15,933 add Expense reimbursements at 3094, results in NOI of 21,535. 

Like I mentioned before, where we live, we don't pay much and so we feel investment properties are the way to go right now.

I see you mentioned the roof and electrical, but what about the HVAC and plumbing? 

As @Jay Hinrichs and others here have mentioned there are lots of risks with subject to or wrap deals.

I'll continue to look in the areas you mentioned.

I am open to all those areas mentioned and I have been looking.