If you don't have a history of Rental Income from the subject Property the lender can use the lesser of:the monthly operating income reported on Fannie Mae Form216/Freddie Mac Form 998; or75 percent of the lesser of:fair market rent reported by the Appraiser; orthe rent reflected in the lease or other rental agreement.If you have a specific property in mind, let me know and we can talk about what would be needed for your unique scenario! 

Amount of folks at the open house/showing- This one can be a subtle or very noticeable indicator about the demand for a subject property in particular.

You might see something where they'll take duplexes that are larger or smaller that have sold recently in a mile +/- radius from the subject property or even triplexes that are closer to size and make adjustments to them to accommodate, but my bet is that is a last resort measure.

Buy subject to her loan staying in place.  

If your assuming the loan (buying subject to) then you don't need to buy out the partner unless your talking about a downpayment?

Can someone explain the difference in wraparound mortgage and subject to the mortgage to me and is one a better tool.

I think being 'overleveraged' is subjective to the individual or entity that owns the properties.

Depending also on exactly what the issue is, you guys may be able to slug it out in a federal district court in Washington if there is subject matter jurisdiction. 

After listening to podcast 527 which was amazing I would like to use Subject to and seller financing .

These are strictly business purpose loans and you will be signing a document stating that will will never use the subject property as your primary residence as long as you have that loan.