Especially would love to hear from investors that could guide on what might help to secure funding?

These investments typically offer returns of 18% to 20% with the added security of being ahead of common equity in the event of a sale or recapitalization.Comparison of Mezzanine Debt vs.

After negotiating, we secured the property for $135,000, which was below market value, ensuring a strong margin for resale.

If you don't follow the process perfectly (such as by not delivering notice on time, or in the right way, or charging unfairly such as for normal wear and tear) you will be SOL and could even end up having to return the security deposit or even pay them more $ above the security deposit. 

However, after reflection, I realized I was becoming too emotionally attached to my first investment after a 15-year break and faced challenges finding reliable contractors.Update (5/17/23):After three failed contractor attempts, I finally secured a reliable one.

You are making a grave mistake by looking too far ahead right now, without capital, because that usually means you aren't focused on upgrading and securing your first asset.

An STR will look every bit as good as it did when it started - because it has to.Not only that but it is much easier for property managers to get repairs reimbursed when a guest damages something as an STR as opposed to when a long term renter moves out and outside of the security deposit, good luck. 

From what I understand, it's designed to replace a traditional security deposit.

We're considering using an FHA loan, but due to his credit score, we haven't started the preapproval process yet.What steps would you recommend we take to secure funding for our first investment?

That you can secure CONTROL and MONITIZATION of a property via a fractional capital outlay vs it's market value, better known as a down payment.