It seems like location would be especially critical with pad-split (and similar systems), but I’d love to hear your thoughts on what to watch out for in terms of zoning, safety, or demand.Also, I’ve traditionally rented out units the regular way, so I’m curious how screening tenants works for you with the pad-split (and similar) model.

Hello Ralph,Yes you can used a HELOC from another property as a down payment for a new one, then get traditional financing on the remaining 100K. 

Your case is indeed a challenging one, especially when traditional lenders are hesitant. 

The Chinese got a little smarter and have tried to overlay capitalism on top of it, unsuccessfully.

We used traditional means, like Zillow to find the property.

I've also used traditional loans through regional banks and a few SBA loans. 

Without going into too much detail, my current situation stems from selling a previous company via partial owner financing, only for the new owner to default on the purchase, leaving me in this position.For traditional financing, I understand I’ll need at least one, if not two, years of solid credit history, tax filings, and other financial documentation.

I am trying to calculate my returns over a 10-year period using the rent-by-room strategy, which results in significantly more cash flow than traditional rentals.

I do not have a traditional W2 job so I can't pursue the typical conventional loan or a FHA since I don't have income (hence the DSCR route).However, I've seen that most DSCR lenders do not lend if the loan amount is less than $100K.

Most traditional property managers don’t handle this setup due to challenges like managing tenant disputes, coordinating overlapping move-ins/outs, and the risk of Fair Housing violations when selecting tenants.