I think the best thing to do to set you up to be eligible for financing across the board will be to buy a mostly turnkey deal, and then do a lipstick reno out of pocket, and then refinance.

Alternatives include the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy and flipping.

Refinance in a couple of years pay him off and you ask him if he wants to fund the next down payment.

If you have equity and can benefit from a lower rate I would look into doing a refinance to fix the issues.

My question is when the three years are up is there a way for me to “refinance the house into my name based of off the equity instead of having to qualify based on my income and pay the owner off”.

Possible refinance opportunities on the horizon earlier than anticipated. 

I would agree with this - its probably too soon / not economical to do a cash-out refinance at this point - options for freeing up equity would probably be best served via HELOC or something to that effect

I decided that in addition to the great return, I prefer the security of a property that can more than cover all expenses and savings with just one of the units.When rates drop to around 5%, I'll cash-out-refinance to redeploy all the money I put into the property.

Well, 14 days later and 14 requests later I still don't have it and still can't close on my refinance deal.   

In exchange, I'm thinking that she would collect all the cash flow and potential equity until I refinance and get the loan originated in my name...