In addition, to factor in their debt load, I require the rent + monthly debt payments to be no more than 45% of their GROSS monthly income.

@Matt Smith generally speaking it’s a combination of rising interest rates which have caused cap rates to increase (thus wiping out equity), debt is resetting at higher rates, rising opex costs due to inflation and stagnant or softening of rents due to an increase of supply.

Assuming your debt is SUPER cheap and only costs you 12% you’ll save $22,800 TAX FREE  So the combination is saving $60k at 12% (or more) is $7,200/yr and $130k in the bank at only 4.5% is another $5,850/yr  so you’re over $13k GUARANTEED instead of a chance to make $7,200 before taxes  

Quote from @Robel Nessro: Hi what's Good Debt and Bad Debt and what is considered good debt and what is also considered bad debt?  

Hi all, My relative wants to combine their $500K personal exemption & a 1031 exchange to liquidate their rental properties without paying taxes, but they are worried about missing the180-day time limits for the 1031 exchange, so they want to involve their son-in-law (SIL).

ps Google  'Dave Ramsey' and 'Debt Snowball'

We were hoping to get agency debt on this to get the best rate.

Is it common to purchase a home with other debt?

Congrats and knock out that extra debt you accumulated so you can save up for STR #2!

This helped my Debt to income a ton and I was able to close on the deal.