If you have a good credit score, reliable income, and a decent DTI ratio you can carry up to 4 conventional loans.

Claim these expenses on Form 2106 or Form 2106-EZ and carry them to the appropriate line on Form 1040.

To get in with little money, the FHA is a 3.5% down loan... but it does carry the PMI for the full length of the loan.

When a property pops up that fits within your framework, you know exactly how to value it, put in an offer, and carry out your investment strategy. 

Especially as an investor trying to house hack while on active duty carries a lot of risk.  

A heloc carries beyond the house

I would contend to you his credit probably hasn't changed, and as you have additional deposit, this should probably carry you through to see if he intends to fulfill his side of the bargain. 

@Jorge Ruiz If the loan is closed within six months of purchase, even paying a private lien like that, it would actually be priced as a cash out refinance (delayed financing), which typically carries a slightly higher rate.If after six months, he probably has a shot of refinancing as a rate/term which is slightly better pricing.

Almost no bank will lend on it, so the buyer needs to purchase in cash or have the seller carry.

Not saying it's not possible, but this is likely the hangup. buying cash and then cash-out refi is easy and done all day, even with commercial loans, but likely all will want you to carry some liability in some form (skin in the game) that said, I'm just one lender I can't speak for all of them