To start the idea of selling lease options when a seller has a mortgage is pie in the sky not legal.

As far as the sale of a property with a mortgage on it, that all gets sorted out at close. ie, you bring your money, the bank gets what they have coming, the realtor gets what they have coming (if there's one involved) and the seller gets the rest.

If you find someone giving you confused looks, seek a mortgage broker that helps investors.I'm not so sure how they would calculate income from short-term rentals.  

Answer sure.. have to check if there is a due on sale clause or if you have a PG to the orignal seller.. that mortgage stays in your name unless there is a formal assumption  Maybe the example is more challenging for a house as the property.Ex. with vacant land - seller finances to me $20k with 5% down and $1k/moCan I after 1-2 months, then resell the land to a cash buyer for $25k, pay off the original $20k and pocket the $5k?

It's not quite as easy as renting out two sides of a duplex, but with the right marketing and management you could rent out the extra unit to supplement the mortgage payment. 

. - This will allow low down payment and the 203(k) allows repairs to be financed into the purchase mortgage.- The 203(k) will allow you to bid on properties that need repairs that won't qualify for a traditional mortgage => less competition => better purchase price.You will need to find a great local contractor you can trust to supply the required bids to qualify for the 203(k).- After closing, you can do some of the work yourself to save money, but the program doesn't allow you to pay yourself.You will want to buy a Class B property, maybe Class C+, in an area that seems to be improving.

I do have experience working in Mortgage Processing and more recently Commercial Underwriting, so if anyone has questions in those areas I would be happy to help any way I can!

@Kris TohovitisI wouldn't recommend using your cash to pay off the mortgage on your primary residence since you can likely get a better return on that money by investing it.What's your buying criteria for the multi-family property?

Quote from @HMS Realty Home Mortgage Solutions: Have you thought about starting out with the first investment of buying your own home? 

I searched for homes based on the mortgage I could afford.