At full occupancy, the cash flow I just keep in reserves for repairs or help pay the principal. 

You also need to consider that at a lower percentage of money down you will be paying a Mortgage Insurance Premium or MIP. 

Add that to about $25K tax for the depreciation recapture, that would be paying a total of $70K in tax if they do the 1031 exchange. 

It’s paid off, I would “like” to leave it that way & maximize the cash flow while paying down the heloc between the rental & other income.  

I am thinking construction loan, but how to pay for it while the construction is going on is a different story.   

Then she still only makes 2% extra for taking the risk of you not paying versus a bank.

All you're doing is paying for that NCF upfront. 

The property owner's tax professional can help them with that and ensure they don't pay taxes twice on the same income.Disclaimer: My advice/opinion in this post is just that, my opinion.

I know what it’s like to be in your position, and I believe in paying it forward.

What would I need to do to structure the note in order to have a note buyer come in and buy the note or buy a partial enough to pay off the 215k at closing and still have some difference coming to me or the note revert back to me after the partial was paid for.