In addition, it has a 4.7% rate and can have a term of 15 or 30 years, which would dramatically reduce the financing costs on any potential deal.  

On one hand, if you took on that debt into your name jointly you could probably reduce the interest rate.

Although, as Jason mentioned, paying extra principal every month would help to reduce the interest payment and also the length of the loan, but since the 30yr fixed mortgage is a close-ended loan, that extra payment is not helping my cash flow, and it does decrease it significantly.

By placing good tenants, I reduce their losses which results in more money in their pocket.3.

If you cant quite qualify, then charge slightly more in rents, that will also help reduce your debt ratio.Bottom line, if you want to go forward, don't listen to banks that tell you no.

She is now more than three months behind, and now the Housing Authority has reduced her subsidy.Given that she is on month-to-month, can I serve her with a 30 day notice to quit, or does S8 status trump all and require a 90-day notice?

Cash on cash would then include the principal and interest received after reducing the amortized portion of your purchase price, that is the return of capital, not profit.It is what it is and there is nothing more, buying notes at a discount can give an obscene return which should be plenty.

Expenses need to be looked at carefully, to see what can be reduced.

Ended up having to reduce the rent by $100 a month and filled it at the end of December.

You might need to defer interest on the 2nd note or reduce the interest rate.