Usually there's a lockup period (often three years) in note funds, so you can't use that cash to do direct note investing.  

I want to create a fund that will allow me to purchase distressed homes, fix them up, and sell with owner financing (possibly including a 5 year balloon so as to be able to recapitalize periodically and give investors a shorter horizon).

The lock-in effect of the period from 2016-2022 when interest rates were super low, causing owners with those low rates to not want to sell? 

During this 24-month period, the property must be rented to another person at a fair market rental value.After the 24 month period your sibling could convert it into a primary residence.

@Ethan Borshansky, There was a brief period of time in the early 2000s when this type of "leasehold exchange" as described above was fairly common. 

Were they all completed within the same 12-month period, or did it take longer?

These agencies began calling me non-stop, demanding I fix the heater immediately and provide the tenant with hotel accommodations during the repair period—or else I’d be issued tickets and face daily fines.I won’t go into detail about how I feel, but anyone in my situation would feel like they just swallowed a bitter pill.

The premise of those opportunities are based on you living there for an extended amount of time.

It may trigger if you are paying down the balance aggressively during the prepayment penalty period. 

The timing of people most apt to say "F-it, I'm done with this stuff, I'm gonna take the $ and run" is in that 90 day period.