You generally have more contacts that you think you do -- your database, properly nurtured, can shake out transactions at a 6:1 ratio. 

Also, keep in mind that carry costs on a hard money loan are extreme. 

(the down payment is completely relevant to the seller)Interest- 7% is pretty standard...it's a premium paid for consideration in carrying the noteAmortization- 30-years is typicalPayment- I would look for the actual P&I based on the amortization schedule, but again, this is relative to the sellerBalloon- 48-60 months is common, and this is completely up to the seller as well (If sellers are leary of the time frame, I always agree to attempt a re-finance sooner...but no guarantees)Some extras:I always pay the listing agent's commision based on the transaction price...otherwise, you can structure a partial commission the first closing and a second commission when the balloon is due...waiting 48-months for the rest of your commission is crazy, thoughWe pay all the doc prep fees (note/mortgage/amortization/assignments/personal guaranty) Typically around $300, so not bad.- use the attorney at title and add it to the HUD-1We use a clause in the note that waives the right to defend a foreclosure in default, so the property returns to the seller without contest (varies from state to state I imagine)We also pay the sellers closing costsAll of this stuff is negotiable...you can always push things with these...like lower the down payment and have the buyer pay all your clients fees and your commission, etc.Give me a shout if you want to chat more about this topic.

Maybe he carries the entire balance, but gets a premium every month based on rents?

Even if the rent covers the carrying costs he could still get crushed taking into account vacancy and future capital improvements/special assessments.

I carry a higher deductible as it can make the annual premium lower. 

As long as the property, or multiple properties, produce cash flow to carry the cost of the HELOC you can leverage all the equity if you choose.

Factor that in as wellI'd like to think we're capable, but would hate to dive in and find out I'm wrong lol - You need to make highly calculated moves and be financially stable enough with 6 months of carrying costs for you personally as well as the home you're financing to flip/rent/etc. 

As you post more, you'll get best responses from being in the best suited forum/sub forum.To answer your question, yes thats the basic concept of how BRRRR works and the deal would make sense, at least to me, assuming you calculated all the costs correctly (purchase, rehab, closing and carrying).

If I end up needing to replace a roof, but the current owner is still carrying the note and paying the homeowner's insurance.