I like umbrella because there is no worry of being pierced for inadequate separation of finances, if sued you have a heavy weight in your corner who has all the consequences of a defeat, and because usually it is reasonably priced (mine today is not so reasonably priced but I believe it is mostly related to the risks of CA).I do understand that the probability of needing the umbrella policy is low.  

However, many DSCR lenders have a minimum loan amount of $100K, which can make it challenging for investors to secure financing for lower-priced properties. 

If I wasn't certain her story tracked, I would ask for documentation of her 401k balance and her application to withdraw money.

Hello Ralph,Yes you can used a HELOC from another property as a down payment for a new one, then get traditional financing on the remaining 100K. 

I agree that is will be a gamble as to how well it will do.Also, ask the owner if they will entertain partial owner financing to keep from dragging family and friends into this risky business venture.Maybe even rent from owner for a year with right to sublease to see how it goes before committing to a purchase.

From the financing side of things - keep in mind that conventional cash out refinances require 12 months of seasoning in order to use the new appraised value.

There’s not a ton of margin to play with these days when you’re financing everything on a flip on hard money loans.  

This has been the most successful model I have seen in real estate.This goes 100% against every guru and investor the past 5 years of get rich quick of buy, rehab, rent and refinance with little money - that video game is out of order so the gurus need to reinvest themselves and they are trying with seller financing and zero down.

How did you finance this deal?

My goal is 25 doors in 5 years, my struggle right now is deciding to either go back to work and save up money to continue or come up with a way to leverage financing to stay afloat myself and stick with it, waking up everyday 100% dedicated to my real estate.