If you take a loan to pay for your mother-in-law you are taking on that debt in your name.

The loan is with you, not with your tenant, so none of that means anything to them - in fact because you live in one unit and it's under 4, if you were self-managing you don't even have to abide by fair housing laws (at least on the federal level). 

Hey Jack, There are two types of loans investors use in their BRRRR strategy. 1.

Stop reading if you want.2) I couldn’t guess what “There is a 6 months of grace period before interest payment begins” means.3) They call their $3555 charge a “Loan Fee,” stated a few lines up as 2%. 2% of $235,000 (loan amount) is $4470.4) Do you seriously believe the loan fee, “… IS 100% REFUNDABLE IF THERE IS ANY DEFAULT FROM THEPART OF THE LENDER OR IF THE BORROWER CHOOSES TO TERMINATE THE LOAN.”5) It’s okay to pay an appraiser directly.

Loan interest is deductible based on the use of the loan, not the asset securing the loan. 

This money gets added onto the back of the loan kind of like a VA funding fee does. 

More on DSCR loans: DSCR loans won't use your income to underwrite the loan. 

What type of loan is this?

Question: Should I collateralize the loan (if using private or hard money), or rely on roll-over loans (to maximize the lower points and 3-4% rate)?

Our issue is income on papers too low to qualify for the an FHA or traditional loan.