With the purchase, the rehab, the closing costs and the holding costs (hard money, taxes, insurance, utilities) our all in is around $200,000, but we have created $40,000 in equity.

I sold it on a lease option and the tenant/ buyer did end up getting their own loan and cashing me out. 

They want you to close very fast so my clients couldn't use hard money loans.

Then you’re going to ask her to give you a 3 year 0% loan?

With the FHA loan you won't need a huge amount of your savings.

Conventional Loan How did you add value to the deal?

Buy and holds is the key to true wealth with all the benefits of depreciation, appreciation, loan pay down by your tenants, leveraging the equity, cash-flow etc etc, but it often times isn't the active income that pays the bills until you build up a portfolio and even then there's the tenant management or managing your property managers.That's why I'm involved in all 3.

OO loan seems like real long shot. 

Yes I know about the VA loan (no down payment) and VA disability payments, more on that later.  

Claims" are an insurance matter.