Two of the biggest challenges I face are that I’m not very liquid at the moment, and the Seattle area is extremely expensive.

For Conventional, you can only use 75% of the gross rent until you have Sched E history for the rental for a net rental income analysis. 

And I suspect their E and O will kick in if this money is lost  just sayin..

Let's assume that the neighborhood is a C class and the median income of the city is greater than 3X of the market rent.Here are some of the considerations I've come up with so far:- Units are in need of renovation and capex is too high or not available- Unit quality is not the same as market - Seller is worried about losing tenants due to increase- Vacancy rates are high or filling units have been difficult- Rent increase would take multiple increases over multiple lease periods to get to market rate if seller is trying to retain the same tenant- Seller inherited property and just want to liquidate- Seller needs to liquidate quickly (financial burden, sickness, quick exit from land-lording)It seems like I might be missing a warning sign about a deal if they are selling with current rents that are under market; but again, this seems to be most of the properties I've underwritten.And in the same vein, what should I be worried about when purchasing a deal with under market rent with the intention of raising them after purchase. 

They give the benefit of instant liquidity and being able to sell them when you need the cash.

@Hira Y. are you sure the PMA expired and doesn't have any continuation language in it?

This was a new purchase with a few vacant units so I couldn’t prevent the vacancy at this time of year but going forward I will make sure none of my leases are expire in NOV-DEC.

If I were in your shoes, I’d look at the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) to stretch your liquidity while building equity and cash flow.

Cash out refi only if the rental income significantly exceeds the monthly payment and you want liquidity to invest elsewhere.2.You can maybe do a HELOC if you want a smaller loan that doesn’t involve refinancing the entire house.3.

Quote from @Jesus E Martinez: Quote from @Jaycee Greene: Quote from @Jesus E Martinez: Investment Info:Single-family residence fix & flip investment.