Lenders will want to know if the property is generating income and if it qualifies for a DSCR loan or traditional financing.

Right now we're shopping around for loans outside of traditional lenders. 

In short, I’m trying to figure out if it’s worth pursuing an off-market seller financing deal versus getting a traditional loan and competing for the property on the open market.

Duluth has traditionally had a strong college rental market and thankfully any small decline in enrollment rates haven't been as severe as other traditional college cities, eg.

While sophistication of your equity partners (private money lenders) will vary between residential and commercial, the principle of raising private capital is the same.You need to develop your own system which allows a constant stream of PML even when you don't need the funds and/or don't have an active deal under contract.For example; I raise private capital by offering free educational workshops for people with self-directed IRAs.

Dan, Investment HELOCS are extremely hard to achieve considering they are not DSCR underwrites. they are more traditional conventional qualifications.

What are the challenges of passive investing as opposed to traditional real estate investing? 

There are still a few that will give you a loan but the traditional 90% of purchase price and 100% of rehab might not be possible without an exception.

We're also starting to scour other forums for possible investments outside the traditional MLS sites, and other areas like upstate NY. 

@Saul Vargas, to piggyback off others, sourcing a traditional SFH rental that meets your underwriting criteria will be complex due to interest rates and market conditions.