Assuming since you did any FHA loan, this was a househack?

(Either with the roofing company, a heloc, or a personal loan.)Either way you will probably be way ahead on interest saved unless you have a sub 6% interest rate.

If I got a home equity loan for Property 1 and used the proceeds as downpayment for Property 2 and then got a 2nd loan for the remaining 75% purchase price for Property 2, when I sell Property 2, can I use the Property 1 loan as part of the cost basis for computing Property 2 capital gains?

If the interest rates go up to around 7% again do the numbers still work for the remainder of the loan? 

Conventional loan What was the outcome?

Since it was over 12 months with my HML, I ended up taking the property under my name with a 30-year conventional loan.

Similar to what Patrick stated - most have ITINs and have seen a lot of loans like that and those are sold many times on secondary market. if not I know people who still originate I would say they are tougher to sell on secondary market but there are still buyersRe: jay comment - price of notes has doubled over past five years on many loans - especially defaulted or loans with some hair too them. 

I doubt he'll be able to quality for a loan (VA) with just his income. 

Financing options do exist: hard money loans, renovation loans, and some traditional mortgages can be used on distressed properties if criteria are met.

Which was $42,399.08/$35,950/5×100 =  23.5He also stated the total loan was $60,000 and the payoff was $55,004.72 over 5 years....He has 1.1475/5 to get 22.9% ROI....WHAT IS 1.1475?!?!?!?!?!?