Or putting 20% down in a conventional loan so you can also avoid PMI. 

We financed this deal using a residential VA Loan.

I have also been doing quite a bit of research on Loan's, tax consequences etc., and am working towards being a expert in this niche.  

Stop reading if you want.2) I couldn’t guess what “There is a 6 months of grace period before interest payment begins” means.3) They call their $3555 charge a “Loan Fee,” stated a few lines up as 2%. 2% of $235,000 (loan amount) is $4470.4) Do you seriously believe the loan fee, “… IS 100% REFUNDABLE IF THERE IS ANY DEFAULT FROM THEPART OF THE LENDER OR IF THE BORROWER CHOOSES TO TERMINATE THE LOAN.”5) It’s okay to pay an appraiser directly.

For instance if this is a $10M portfolio that's levered with loans totaling $9.1M, there's no equity that can be pulled but if this is a $1M portfolio with $100K of debt, its a different story.

His "buyers" - who could not qualify for a loan because, presumably, they could not convince the bank they made enough to cover PITI payments - inevitably defaulted, and after a few months he would evict and start all over. 

these are construction loans 

I've never done any Sacramento STR loans and only been hit up for one potential financing opportunity there.

The most important thing is to ensure your loan is covered in the event of a loss.  

They have contacted me for a commercial loan.