So I am starting the loan process over again, for the third time.  

I spoke to her and they were going to do a light remodel (barely lipstick on a pig) and start renting the place. 

This had me thinking if I'm wrong and would like to start a discussion on the subject to see what ever one else does.

I'm starting to see more private note holders reach out to get a loan against the performing note they hold. 

That is awesome, congrats on getting started!

I'd love to start hosting asap and I wouldn't allow the guests access to the kitchen (though of course they'd have access to their rented rooms, bathroom etc.).

Negotiate alternatives thereafter, but start the clock. 

I first started in investing though house hacking.

I understand this is a good way to become financially secure over time and am eager to start.  

The seller offered financing with 20% down, which I used to buy the place.After starting construction and realizing it was going to cost more than expected, I approached a small local bank that knew the property and would offer the rehab financing.