If selling puts you in a better position to move forward confidently, it might be the right call.

The seller is already in first position and in a perfect world I'm not refinancing out of those terms, and I'm not giving up equity to a money partner. 

I think Chris makes a good point of determining the strategy - performing 1st position notes is always a safe "dipping toes in the water" type of note to go with. 

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

@Renee LeFevreTo rent out your basement, follow these steps: check local regulations, prepare the basement with separate entrance, screen potential tenants, draft a lease agreement, set the right rent price, consider tax implications, update homeowner's insurance, and build a positive tenant relationship to attract quality renters.Good Luck!

If structured well, this strategy will position you for rapid expansion.

You can’t really “lowball” rent offers so I’ll posit the advertisement matches up with the actual lease terms.

If you're gonna lend you need to be 1st position lien.

I’d love to hear any advice or personal experiences from others who have been in a similar position.

In today's world you need to be about 28-35% down on properties to be gross cash flow positive, closer to 40-42% to be truly net cash flow positive(i.e 50% of your income goes to maintaining the property, other 50% is actually profit).My recommendation is to buy ideally a 4/3 SFR that's a starter-friendly one in a good area, and rent it out by the room.