The difference would be the amount of new debt or out-of-pocket cash that you will need to put into the property.  

Basically a strong cashflow business with limited debt. Or

I will assume 30% and I would run the numbers like below:The deal looks promising but I will make a few notes:Vacancy at 3% is too aggressive (in my opinion)There is no bad debt or concessions in your proformaYou're missing Administrative, Marketing, and Payroll costs in  your proformaYou're missing turnover costs but you have good capX so that may be OKThere no utility expenses in your proforma

You can do a private capital raise by debt or by equity from one partner, you can get a hard money loan and refi out later, you can do a combo of bank and private money.

For example, I think we are late cycle, so I lean toward the safest part of capital stack which is debt (or debt free equity).

I am committed to making sure they don't graduate with any school debt or school loans. 

I hope she did not misinform the loan officer that I was looking to clear debt or some other cockamamy reason for needing the money.  

If you want to be less in debt, or have a target monthly "not to exceed" payment, great, go for it, but other than that there's really no point. 

I do not have any debt or bad credit and have a steady descent paying government job which should allow me to get approved for a descent loan but probably nowhere close to the 400k mark.

The debtor's attorney has been in contact with the trustee and knows the status.