Nothing in my contract states I have to wait but I don't want any surprises.

That would be illegal in all 4 states I am licensed in, and am very surprised to hear it is legal anywhere.  

You will be surprised what paperwork the seller can come up with so that they can get that big check.

Drive around on the weekend and check out the "ghetto" street by street and maybe you'll be surprised to find some honest working-class neighborhoods.

For what it is worth, PoL Investor Agreement requires you to agree that you will not purchase notes exceeding 10% of your net worth (not including your home and car); it would not surprise me if some people may have overlooked that.

Don't be surprised if you call 50-100 banks about this before you find a solution.

I'm surprised nobody has expressed concern over the source of down payment.Apart from the concerns regarding building enough value to cash out refinance, the OP intends to use the cash to repay his parents, for the "gift" they gave him for the down payment.If the gift is truly that, it shouldn't need to be repaid.

(would it be a surprise if you find out subletting is allowed later)Can you review their initial applications and background verification if any? 

It seems like this is hurting my options (no surprise) but I am being told it makes the idea of buying a home through non-traditional financing methods and then doing a cash-out refi impossible.

He laughed at my surprise.