Do your relatives have experience? 

(You can see my search results in the images)I am not sure of your relation to the house from your posting.

Hi @Denise Turnipseed - were you ever able to structure a deal on your relatives home?

It will cost lots of money, time and effort from you and your relative.

You might have issues getting membership at BECU since you are out of state, but might be able to get in because of your relative, but just an example.

The only logical circumvention to this would be the private lender purchases the entire house and then sells it to your relatives and provides seller financing which would give him/her the exemption from license provided he has not written 4 other real estate loans in the last 12 months.  

Marc,Part of the reason is as @Brian Adams and @Brian Burke mentioned, but there is also Estates to worry about, holding on to a property until your relatives inherit it is one thing ( the basis for the property is what the property is worth when you pass) and great if you completely own it but to investors, this does not help them, they would have to pay their share of capitol gains when the property is sold no matter what. there is also a point in time where a properties worth actually starts to cost you money, mainly because depreciation and the cost of the recapture tax starts to reverse the profit numbers if the property does not appreciate enough in value.

(leave your relatives behind until you "make it") you can always visit and they don't see you anyway, you're working too hard.Now, for the real estate investing side, you can join a service group and meets lots of people who have money that would like to invest with you, Kiwanas, Elks, Eagles, Chamber of Commerce, etc, etc doctors, dentists, other successful businessmen.

Perhaps someone here will correct me, but couldn't you use the 20k to reinstate the loan, and after that your relative can transfer title to you?

I'm concerned you could have trouble getting rents in the event your relative has issues with the roommate and the roommate ends up moving out (especially if the roommate has a good argument in doing so).Or what if one tenant (whether your relative or the other roommate) pays and the other doesn't?