Walk the ethical middle line and you will get tripped up over and over again trying to stumble to your first deal.

How is ethical for the HUD inspector and bank to do this?

These are professionals with additional training and a stricter code of ethics.

I hope to be able to strike that same balance with my children that they hear the principles I'm teaching them but feel the freedom to choose their own path with feeling judgment or criticism from me whatsoever.

That said, our principles around debt-avoidance are not going away, but we would make sure before we take on more debt that we have enough savings in a reserve to cover the rental property expenses (on all investments) for at least a year if we had to for some reason.  

The gap between the ARV and buy price is very low, a key principle I follow is if that gap is $120k so that there’s more profits for you as the wholesaler and for the rehabber.

These are professionals with additional training and a stricter code of ethics.

These are professionals with additional training and a stricter code of ethics.

Its not really a scam, but more an ethical/moral issue..  

I highly suggest reading the book "How to create multiple streams of income" by Conti and Finkle, it's a bit outdated but the principle still stands.