If the flip property is purchased with this cash, you would have to work out between the two of you who is going on title to the new house.You also have the option of borrowing just the down payment against his house, and then financing the remainder of the purchase price against the new house, although that would be less straightforward than just taking out one loan.Keep in mind a lot of lenders cap the amount of cash out you can get at $500,000 or $750,000, but there are lenders that will go to $1 million and even more than $1 million.

I would do a cash-out refi and buy another one or move to another house and rent the one that you are living right now, as long as the numbers work out right.

While I haven't given up, I am tired of waiting for things to work out where I live. 

2) If we work out the details, and proceed without the help of VRBO, should I make him sign a simple month to month lease?

Developers also over-state development costs to work out better for them.

I am currently talking to some commercial lenders for a portfolio loan but don't know if they are going to work out.

Shame it won't work out.

Has anyone obtained loans from them and how did that work out?

So for these, you just need to work out how much less than ARV you care to go.But if you're talking commercial (5+ units), then yes, rent is very important in helping determine value, because their market value is heavily influenced by the market cap rate there!

Putting some things off until later in the project hoping that they will work out.