The problem was, they only had enough money for a 3.5% down payment and an FHA loan.

Low appreciation may make the RoI from these assets low over long term, though they will cash flow on day 1.

His reason was the only thing he knew to do with the proceeds was to loan it back out at 12%, and he would be "behind" where he is now in cashflow.His proceeds would have given him options up to and including PE, but he is a simple man and in his case holding was the option for now. 

I'm interested in how others structure their ALFs.2) I'm thinking of going with an SBA 504 loan to acquire the property and do the remodeling.

Long term play would be to either use it as a short term rental or 1031 exchange it after 2+ years.

that OR consider buying a property you could short-term rent to people who literally just want to visit the casino if it's a large/decent one. 

Doing a 75% 1st mortgage and 15% heloc or heloan would likely give you better cost of funds all around.If this is an investment property, you can do 80% cash out refi using NonQM loans such as DSCR loans, but at a higher cost/rate than if you stick with 75% loan to value. 

These should be reflected in the purchase price or negotiated as part of the terms, such as the seller carrying some of the renovation burden.Use seller financing to your advantage by proposing a price closer to $225,000-$250,000 with terms such as 20% down, a low interest rate (4-5%), or interest-only payments for 3-5 years, with a balloon payment once renovations are complete and cash flow stabilizes.If the seller is firm on price, consider negotiating higher down payment terms to reduce the financed amount, paired with interest-only terms or a price reduction tied to renovation milestones.Key questions to address include the condition of the septic system, which can be a significant expense if it fails.

Quote from @Ben Russell: Although I agree the leases and the legal implications of "Mid-Term" rentals and "long-term" rentals are closly related, I don't think the leases should be identical. 

Im trained enough myself at this point in QBO, but my bookeeper still does the more complex entries (Loans, capital balances, reconciliation, etc) I just do the data entries for expenses.