@Marisa Faulkner This is going to depend on a few key variables that will be different for many of us depending on where you are in the US.

Hi Matt, When I mentioned 1099 type tenant, I am just referring to self-employed tenants with cash flows that might vary widely at times depending on their receivables aging. 

Either option would work it just depends on how the deal is able to be structured with the seller.

All houses settle at least to some extent over time.Big cracks on driveway - well - just depends on whether it's to a point where re-doing is needed, and if the project pencils out.

So much depends. 

There are programs for as little as 30 days seasoning for cash out, and then anything after would be gravy and depend on lender to lender. 

I believe these processes also depend on the location and whether the state and place is in judicial or non-judicial territory. 

I think it all depends on what your risk tolerance is, and what your timeline is for how quickly you need to access the money.

@Grayson Gist  What would be best for you would depend on the laws of your jurisdiction.

We market the property at lower price and then discuss a sort of 'cost averaging' for that utility during lease signing.Here's another 'out of the box' idea - depending on your layout and climate - you may consider electric baseboard heat as a different option for heat, coupled with using window units for air....Jim