I have over a million dollars in real estate in the US and can use any of the properties as collateral.

His only concern is getting a reasonable rate of return that outperforms the market with a secured and collateralized cash flowing commercial property. 

This one is coming with 20% instant equity and needs "nothing" to rent out in the heart of grandview it's already a bit overdone for the area - granite, stainless, hardwoods, outbuilding) - I think this one will rent as soon as I take possession and market it.On the financing side, I took my relationship with portfolio lender a step further and moved some security assets I've been holding a long time (income oriented things like bond ETFs) for free to their asset management division, which allowed them to give me a line of credit with those as collateral at 3.5% "interest only".  

You may also want to look into whether you can wrap them into a commercial loan that's cross-collateralized over all the properties. 

True collateral lending, no credit requirement, tax returns, etc.I've been getting the first chunk from them and putting PM (secured by another property because they dont allow 2nds) to do the rest.Private lenders are great, but the ones that have the kinda coin to loan you $100k+ are few and far between. 

Our family friend loaned the occupant money and they put their house up for collateral.

After notice, an owner may not further encumber the property, they may not grant any interest in or to it except in a sale where the mortgage in default is paid.If you were to pay her anything, it would be equity stripping, same with any rents received above the note payment as all interests in rights to the collateral become due to the mortgagee.If a bank allowed a mortgage to be brought current and allowed her to rent, of sell, that might be different, this bank won't I'm sure......this is a "sorry & walk away" if you can't buy it. 

The lender may not permit the replacement property to be parked if the property will be the collateral for the loan. 

Seller financing can take you off title, but you are still tied to the property as collateral.

Finance is not real estate, it's simply the collateral to a mortgage, it is highly regulated and violations can be felony charges with stiff penalties, big bang screw ups can get you 10 years and/or $100,000 fines plus  the loss of a note and costs.