I have already been fully qualified for both the line of credit and DSCR.

In most of those cases, their broker took a high fee and the investor didn't end up with a great deal.Here are a couple of things that are a tipoff you are not working with a broker with your interests at heart (1) they want to pull your credit before having a conversation, or (2) they send you a long list of things you need to provide them before learning about you and your deal.The conversation should start with why you are interested in REI, then understanding your strategy to get there.

I could be misunderstanding how this deal was structured, but wouldn't the seller who is on the underlying mortgage have an incentive not to let it go into foreclosure since their credit is at stake?

makes sense. so i actually did a 2-1 buydown FHA, i have a 800 credit score and locked in a 5.875% in today's market which is pretty damn good IMO... so the first year ill be at a 3.875% with about a $2350 monthly payment including prop tax/pmi/morg insurance/home owners insurance. lease is locked in for a year at $1400 a month which makes me only have to pocket roughly $1000. the way i see it, its cheaper than rent or mortgages in today's world!...

The credit unions tend to have lower fees and offer solid business products.

That way, you might preserve some of your monthly profit while still knocking out that line of credit.

So act quickly, do as the others are saying and screen him according to your standard criteria. credit, references, eviction history, etc.

In general tenants with a credit score worth preserving pay all that is owed.

CA there is NO possibility of a deficiency judgement on a purchase money owner occ loan.. borrower can walk and the worse that happens is their credit will have a foreclosure if the bank goes that route or a deed in lu. 

Perhaps slightly higher from an alternative lender but definitely not from a credit union and expect much higher fees.