Both carry risk, in my opinion, the former more so and the latter is the better route.

If it sells they will not let it carry forward. 

This does not mean the buyer/borrower will default on an owner financed carry back mortgage.

While the terms might be different from traditional financing, private money lenders can provide capital when you don't qualify for conventional loans.Creative Financing Techniques: Learn about creative financing techniques such as subject-to deals, lease options, or seller carry-back financing.

Carrying on without facing the challenges could very well mean the end of your career.In the Real Estate world, sure reputation is also on the line, but so are the monetary investments regardless of how large or small.

It's a good rule of thumb to follow mate.We always get caught up on the potential of a deal or business and don't focus on a "worst case" scenario.Experience has taught me to become a "Negative Nancy" first and evaluate the downside from a risk assessment standpoint.I would always get too carried away and am optimistic and easily influenced to believe in the best in people and ventures.Only to get my A$$ handed to me on a plate.Well not anymore... lol

Normally (yeah, bunch of income limits), passive losses can't be taken onto your main return, but are carried over year over year until you have net passive income to offset.  

Note all investments, including real estate, carry the risk of loss in addition to possibility of gain. 

.- I could go traditional loan, using primary home HELOC as down payment, so effectively carrying two notes (down payment with higher HELOC rate, balance with current mortgage rate). - credit score is above 800.Any guidance on above options or ideas on other financing scenarios would be greatly appreciated.Thanks so much!

i personally use my regular phone but you could use a google voice number or an actual physical work phone with a different line. i'd do google voice so you're not carrying around 2 phones. :)