As a LO, the charity case client who wants to nickle and dime me over paperwork isn't going to close anyways, and so isn't worth working with.... sorry, but that's the reality. 

Again, this is not something that an order-taking LO from an online lender or bank is going to be able to help you with. 

Lo and behold, the property is a mess.

I don't do L/O's and am curious how you prevent this.This was an obvious fixer upper, and you said the tenants compalined "the owner won't do this and that" (which makes me think you did an assignment), what is it the owner was supposed to do, and didn't, in a L/O?

Lo barato sale caro....

He hands over all his cash to you, and lo and behold, he continues to get proportionally sufficient income, like he already is out of you?

I used a L/O to broaden the buyer pool.

On a LO you pay them rent (the lease) and a small amount to reserve the right to buy (the option to get the deed).  

If so, PM me and I can get you in touch with a rockstar LO that won't bend you over on the rate.Or perhaps you're getting those terms because you don't have enough equity for Conventional financing and they are giving you a portfolio product.Either way, if you want to house hack another 4-unit with 3.5% down, then FHA is your only option. 

The CFD and L/O is used to create ease for the seller to get the property back without foreclosure.