Bob arranges the money for Joe, so the bank is short again even though Bob could have paid more on the debt.

I would agree with Chris, I would not use debt to cover all costs and then hope to get a good pop on the sale to cover all the debt, payments and still have some in the end to make a profit to do it again.

You are required to disclose that debt, and it will be a fairly easy catch for an underwriter, even if it's not on your credit report. 

More importantly, get the high interest rate debt paid off first.

@Kyle Kline“Investing for equity and not cash flow” doesn’t mean “buy properties that don’t cash flow.”To me, invest for equity not cash flow means that the PRIMARY reason to invest is for equity growth and an increase in net worth and NOT cash flow.I’ve been investing for over 40 years and while cash flow is important, it’s not why invest.A property must be self supporting ie produce enough cash flow to cover debt service, operational expenses including repairs and replacements.

In addition to down payment you need reserves which is 12 times or 24 multiplied by all you debt.

And after observing @Benjamin Aaker in action I love how he manages his debt. 

The key is to understand the capital stack, who is in line in front of you and what are their terms.The people who are getting burned may have known there was debt in front of them, but did they know it was short term or variable - did they know all the details to make a good judgment on the investment.If a property had 20 year fixed debt at 70% would you take that over 3 year debt on a variable rate at 50%? 

By temporarily halting distributions, we can preserve capital, manage our resources more effectively, and invest in key areas that will drive future growth and profitability.In the interim, we are taking strategic steps to strengthen our financial health, including cost-reduction measures, revenue-generating initiatives, and debt restructuring options.

@Seth RolandLoans like bank statement loans or DSCR (Debt Service Coverage Ratio) loans could be great options.