If I got a home equity loan for Property 1 and used the proceeds as downpayment for Property 2 and then got a 2nd loan for the remaining 75% purchase price for Property 2, when I sell Property 2, can I use the Property 1 loan as part of the cost basis for computing Property 2 capital gains?

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I doubt he'll be able to quality for a loan (VA) with just his income. 

DSCR loans are not that low and regular hard money loans will be in the double digits.

@Enrique Toledo  If the seller is firm at 10% down, you can always get a personal loan for that 10%. 

I locked a DSCR loan yesterday at 6.385%, 75% LTV.  

Purchase price: $240,000 Cash invested: $60,000 I purchased this duplex in distressed condition using owner financing for $240K and secured a $60K hard money loan for renovations.

They were thinking of planning another one that required massive loans (7 figures).