Understood that DIYing something that I don't do and saving $7 per month (that I'm charging the buyer for anyways) could blow up in my face if there are unforseen results in this process.   

Of course I would like a shorter term (or none if possible) Ah understood, I would ask them to show you other options. 

Ok - understood.  

My parents conditioned me to be a great saver, but saving will not lead to financial independence in most cases.Once I understood my relationship, and used the savings to invest in an asset to pay for an event, everything changed.

Of course, any capital improvements you've put into the property would be added to that purchase price which may reduce your taxable gain.But returning to your question, assuming I understood it right, what you're suggesting should work. 

A lot of brokers are not even aware of what rental arbitrage is so maybe your broker understood a completely different concept.

In fact there is absolutely nothing wrong with the above described technique as long as it's fully disclosed and UNDERSTOOD by all parties.John is "disgraced" because he got involved as front man with a Salt Lake City real estate marketing firm that promoted John all over late Nate TV back around 1998 - 2003.  

In the case the way I understood it, if three people get together to form a hard money lending company (say a LLC and each is a member and each contributes X dollars) and they lend you the money - then you are getting money from one company. 

Had i not understood all the ways real estate makes you money, I would have never gotten to 83 rentals and over 10 million in net worth in a 15 year period.

We've been able to work with some brokers who understood how to pitch it to sellers.