Most lenders require proof of someone else paying the note for around 9-12 months so that the debt isn't counted in their DTI calculation.

How much weight do you give to the cash flow benefit of cheap debt when the property is priced above market?

We buy at a discount and pledge our legal right to collect the debt (a collateral assignment agreement) as the collateral for the private capital loan we take out, which is backed by the value of the real estate securing the 1st loan.  

Unsecured personal debt is often from institutional sources, but at rates of 9-20%, fully amortized over 3, 5, or 7 year terms (not interest only).

So for example I'm very conservative and don't want any debt on them because I feel this hardens them in case of a severe recession.

If you are open to non-traditional methods of financing, you could use a debt service loan to bypass that requirement.

The total deal with debt was above $10M but the total equity in the deal was around $4M. 

Any existing debt?

You can claim to be the best guy in the world at finding and analyzing deals, but when the market turns against you, and you just went all-in, even on the best relative opportunities that market had available at the time, there is nothing you can do to prevent losses, especially if your debt has a maturity date that will force your hand.Timing the market is an interesting concept. 

This eliminates the problem of increasing your debt and damaging your credit score.