@Bill Brandt Maybe my inexperience is showing, but do you believe we're in a similar "real estate boom" as we were during 2008?

This is where the experience of your agent will be worth their weight in gold, or, where their inexperience will kill your deal.If the senior is a Fannie/Freddie loan, 99 times out of 100, excess proceeds are capped to the junior lien holder at a paltry amount, ($6K or in some cases, $8.5K) regardless of the balance of the loan.

I had a triplex under contract earlier this month but the seller/agent smelled my inexperience and tried to sell me a dud.  

I think a lot of my fear comes from not having money and my inexperience.

It's a birds-eye view of asset protection for investors starting out and should give you an idea of where you want to be.When you are just starting out you have the benefit of not having a lot of exposure and minimal assets to risk, but on the flip side you can make some rookie mistakes because of inexperience (and often insurance will have exemptions built in to try avoid big payouts for your personal mistakes.)

My question is- does this arrangement raise any ethical or legal red flags that I don't foresee due to my inexperience?

But while working summer jobs at my fathers company he eventually just did all his quotes with materials and labor broken down because it was easier to explain to clients with inexperience in construction.Besides that I would always get several quotes to compare.  

Due to my inexperience with this product I wasn't how to explain it.

They can be upfront and honest while still exploiting your inexperience.

Put it on the market, listen to the market and go back to the seller and renegotiate.I see how that can work but.......Im trying not to let my emotions and inexperience lead me into a bad deal.