The prices in the markets we looked at i.e. troy, Schenectady and Albany all had great prices and rents were inline but kept coming back to "what if the tenant doesn't pay". 

Yor offer starts off with, "I'll pay your commission" and here is what I'd like to offer your client. 

In return, they will be motivated to get a job and pay back every dime owed while lavishing you with praise.

Nothing illegal about doing that, but if caught, the lender may call the loan due and if you don't correct the situation or pay the loan off, they willstart mortgage foreclosure.3) You could also go the HELOC route to tap the equity in the home, but the 12-month owner-occupancy will also apply AND the interest rate on the HELOC will fluctuate with the Fed Fund Rate.4) You could do a cashout refi as an investment property, but that will be at an interest rate 0.5-1% higher than owner-occupied rate.Suggest you meet with 2-3 lenders to explore your options about the above.Once you have access to funds, recommend you buy a 2-4 unit with 20-25% down. - You can buy owner-occupied, live in one unit, and fix up and rent the other unit(s).- If you're handy, recommend buying a property in the worst condition you can tolerate.

Then he is going to hire subcontractors to do the job and you are going to pay them for that work as well.  

However, aside from that, I couldn’t find much information about them, and the only online presence seems to be the wife’s LinkedIn profile (though I’ve never met her in person and am just going off her profile picture on Zillow).After submitting the application through Zillow, we attached our income (two months of pay stubs for each of us from our current jobs), work references, credit and criminal background, rental history, and the contact info for our current landlord (who just so happens to be my fiancé’s father).

If it's in the restricted zone (within 31 miles of the coast or 62 miles from an international border, you have the choice between using a bank trust and paying the fees mentioned above or using a Mexican corporation and bearing the costs of establishing and maintaining  the corporation.

They're less than I pay.

Please clarify, how many lenders we have "signed up" and how much they "pay" for "leads".

You will make more from loan pay down, yes you SHOULD have some appreciation.