The fact is that anyone who takes, leads, or carries away the property of another with the intent to convert it to their own use or deprive the owner of it is committing a crime. 

Having the seller carry a second is not a problem for the first, as long as their business with you is finished and the loan has closed.

Beside investing their own cash on the same terms, the sponsors return should be heavily weighted toward “carry” (receiving the bulk of their return as sponsor in the form of an interest in the property rather than cash) with that carry subordinate to the investors receiving their investment returns PLUS a minimum annualized return.

The land is on two tax lots so my plan is to sell the extra lot immediately after closing for a projected $275K.The property on the other lot will be a fix and flip with projected costs of $240K and an ARV of $750K.I plan to use a PML of 2 points and 12% APY for 70% of the total cost.

Also, how much time do you want to spend doing real estate vs. your main job or extra work in order to fund it.

But I would charge the extra 3% to cover my costs.

In many markets section 8 is higher than market rate. and investors need that extra return to mitigate the risk of sec 8 tenants generally speaking.

I wasn’t prepared to lose so much of my savings as carrying cost basically I paid for the tenants to live there for 3 months + my own living expenses in that time.

That would be a helpful addition to your plan as you would further reduce your cost of living.Also don’t forget from that $600 you are planning on getting in cash flow you have taxes, insurance, maintenance, capex, and vacancy to consider.With two homes, you may want to keep that extra $20k as an emergency fund rather than spending it on a third property and then be left with no emergency funds.

But having those rules on paper was like carrying a big stick—great to wield when needed but mostly a deterrent.