I wrote about this extensively here and also made reports to the SEC and FBI.

@Robert GonzalezMost any DSCR loan is going to be chalked full of docs where you agree to NOT occupy the property while under the terms of the loan you are signing docs for. 

Prepayment penalties- usually 1-5 year terms.

It sounds like you’re in a great position to succeed, given your extensive renovation expertise.As a fellow real estate investor, I completely understand how challenging it can be to choose the right design elements, especially when you want to make a space appealing to potential buyers.

With rates and lending terms constantly changing, I’d love to hear from those who have recently closed or explored a blanket loan.Which lenders are offering solid terms right now?

I recently purchased a Short Term rental property and plan to self manage the property.

The ADU would be utilized as a short term vacation rental. 

What terms is he offering (monthly payments, amortization, balloon, etc.?

Regardless of legal nuances, I can tell you from extensive professional experience: Don will WIN an IRS audit for his Subject-to interest, as long as he can show that he made the payments.

-Seller Expectations: Ensure the seller knows and understands what to expect regarding terms and timeline-many sellers are unfamiliar with seller financing.