In order to execute on any of the strategies from #2, you will want to a work/income history and decent credit scores.

You can decline them off their credit, background and for not having 2 past positive references.

to your point, if you save up so that you're in a strong financial position, house hack a solid duplex in a decent neighborhood, make smart decisions, and hold it indefinitely, you'll be fine.conversely, if you have $0 and somehow start out with a risky flip, or borrow $20K and spend it all on a magic mentoring program, or buy a terrible property in a neighborhood you've never been to, you may not be fine.

So you can scale that if you want.FHA is for people with poor credit and very little down payment.

It’s because having cash available doesn’t not necessarily mean the borrower has the credit CAPACITY to obtain a loan.  

For example, if I do S/P top stocks, I could get around 11%. but if I did real estate and I have a 800 credit score - could I do real estate and make it work harder doing turn key Multifamily. 

When you tell them they will only get paid when the loan closes, they will disappear.If required, the only money you should ever send to the lender is for a credit check.

I could very well see people taking advantage of people in this situation, which would be a terrible thing to do.

I have the credit, experience and the knowledge on how to underwrite the deal to show their ROI in this arrangement vs a traditional sale. 

You need to build your credit.