Speaking as a lender (not investor) with some experience in small balance commercial lending, I can tell you that it is likely going to be tough to find financing most likely as a lot of commercial lenders tend to stay away from churches, although could be more favorable if the building is true retail/office rather than a structure built specifically in the style of a traditional church (i.e. hard to transition to other tenants if needed)

Honest feedback here - I hate the arbitrage model Why?

There are still a few good resources for Log Cabins or Off-Grid style properties in remote areas as well.  

Sounds like there was not a fit in terms of style .. like a Wall Street type trying to hang out with a SoCal surfer type.

Cap rates seem pretty low relative to mortgage interest rates.Has anyone seen this model work in this economic environment?

This type of financing will typically look very different and more like a traditional commercial real estate loan.That means a DSCR calculated based on a full NOI and expense load (so inclusive of vacancy loss estimates, credit loss estimates, repairs and maintenance, utilities, management fees and more – in addition to the property taxes and insurance expense that are the only expenses factored in on traditional residential style DSCR loan financing).Additionally, the DSCR minimums are generally going to be higher (typically up to 1.25x), the loan to value ratios lower (higher down payments) and underwrite more sophisticated (which makes sense considering the size and scope of the property).Many multifamily investors for properties of this size (such as more than 11 units) can syndicate capital and have more sophisticated financial and entity structures – its definitely a different world once you get up here in unit count.In Conclusion – when you are looking to invest in multifamily real estate and finance your investment – make sure you have the unit count in mind before you start shopping – the unit range can have a huge effect on your options.

However I hear the same thing about most rehab owner occupied programs and the rate on fees on this is a lot lower than a 203k or home style.

I agree with @Francis Faucher completely.Definitely not worth it to swap business models if one is working well, would be silly in most cases.A few investors and agents on my team in MA are operating in the syndication space putting investor capital to work with great returns even by today's market.

Choose plants that are easy to maintain and complement your home's style.

If you want to copy that sort of model, go be someone's assistant for a while, with a base wage that'll keep you from starving.