He didn't say anything about flipping the properties TO HIM for a finder's fee. 

No fees, no pre-pay.

@Loren Souers I'd have to run the specific scenarios with the rates and fees, but if you're OK with paying the higher closing costs, the Mortgage 1 deal looks good, particularly if you focus on CoC returns.

I have written about it before in long past. 2) Yes, no PM and no tenant placement fee consideration.

The main downside is being dependent on the HOA—issues like poor management, rising fees, or unexpected assessments can hurt your investment.

They like to keep their algorithm hidden.

However, there are also some downsides to consider, such as higher fees/interest rate.

(Late fees would be one example.)

Hopefully you have a Checkbook IRA to avoid the red tape and fees of going through the custodian for each transaction.

Flipping on a land lease with high HOA fees = challenges that could impact profitability. $700/month HOA fee may deter buyers, elongating your resale timeline, and could push your ARV closer to the lower end of your range.