In my opinion, Dallas represents more upside with lower risk, and is less expensive than Houston.

Lower Repair CostsHiring licensed contractors for minor fixes can be costly.

So, for a $2,500 rent with a 3x income rule, you’d expect their combined gross income to be $7,500/month.As for utilities being included in the rent, some landlords in NYC do lower the income requirement slightly (e.g., to 2.5x or 2.75x) since tenants won’t have additional out-of-pocket utility costs.

.- Investors get access to real estate cash flow with lower costs and no landlord responsibilities.- The whole process is simplified—no co-ownership legal headaches.I’m curious about the pros and cons of something like this.

For an absentee landlord, it would seem that a condo could have less maintenance headaches than a SFH and lower risk in general. 

When I asked them why they lowered it they stated cause they wanted to lower their exposure to the market.

@Jonathan Bombaci recommend using that amount as a bargaining chip for lower rates.80% of evictions are wash, rinse, repeat. 

I'd wait this one out until rates lower and you can refi and learn from it to buy better the next time around. 

I am doing my best to accommodate and fix the insulation as well as see if there are programs in place to lower the cost. however i want to be firm with tenant as they are not compliant with paying rent because of the cost of the utilities.

DSCR or Fannie/Freddie loans can go up to 75% on single family homes, multi family homes (2-4 unit) max at 70% if you stick with Fannie/Freddie.Other things to consider would be:Paying points for a lower rate vs higher rate with no pointsIf going DSCR - Prepayment penalty term (0-5 years)The lower the loan size ($200-250k and lower), you should consider paying up to 2 points and doing a 5 year prepayment penalty if going DSCR.