Let's say they need to foreclose and the borrower picks up the Yurt and moves it - now the entire loan they underwrote is thrown out, along with title insurance, and the lien on that property.- Value: A SFR, or 2-4 unit (what it would be in this case) are residential assets and thus are valued off the "sales comparision approach" rather than the income approach.

Most borrowers I speak to are just assuming that rates will drop off the table in a few months.

Quote from @Virginia VanOeveren: To start as a private money lender, educate yourself on real estate investing and lending practices, define clear loan criteria, and conduct thorough due diligence on borrowers and properties.

One of the biggest risks I observe with flips and first time investors are instances where the project goes over budget or gets stuck in mud, can't sell and even worse the borrower doesn't have the credit profile to refinance out to a lower interest lending source if borrower is required to hold the property as a rental. 

Perhaps it has something to do with the statistical average where in Australia, if you are borrowing 75% on property in the cities or suburbs, it is almost impossible to get positive cash flow ANYWHERE, whereas BP subscribers are aware that in MANY parts of the USA, the opposite is true.

Once you complete their application process, they will determine you don't fall under their top tier borrower qualifications and propose terms that are far less favorable.

If there are any issues with the borrowers, I don't have to deal with it.

I can see where the bank may be unwilling to make a loan to this particular borrower, or that this borrower may be unable to find anyone to finance them, but financing the purchase of a note is possible.The borrower has no ability to allow or disallow the sale of the note that's backed with their loan.

If you don't plan on paying cash and have to leverage with an owner-occupied loan product then you should set up your LLC as a property management company because you will not be able to borrow in the name of the LLC.  

If I decide to go with option 1, I will have to borrow the money for the renovations at my primary and it may make it harder to qualify for a loan given the little or no cashflow.