Loan terms seem reasonable.

If the lender is licensed in the state you're buying in, then they can do the loan.

His reason was the only thing he knew to do with the proceeds was to loan it back out at 12%, and he would be "behind" where he is now in cashflow.His proceeds would have given him options up to and including PE, but he is a simple man and in his case holding was the option for now. 

@Timothy Parish Yes, you should have take out 401k loan vs what you did.

It sounds like the issue is with the Debt Service Coverage Ratio (DSCR), which lenders often use to determine how much they’re willing to loan.

It could be some sort of skill set for renovations, design for furnished rentals, specific market knowledge, owner occupied loan products for a house hack, etc. 

with an FHA loan How did you add value to the deal?

Today's lesson: why I won't use VRBO Pre-Approval anymore.I get inquiries from time to time asking things like- is your place truly ski in/ski out?

Have you looked into DSCR loans?

If you include the costs to build in a purchase of the primary structure, then you can typically roll that into the final loan product.