Again honest curiosity. 

- Meanwhile my carrying costs are accruing from the private money loan.- They actually have the nerve to try and enforce the $100/day penalty for not closing on the agreed upon date even though it had nothing to do with my ability to close.- I finally get pissed enough that I cancel the contract telling them that the only way I will buy it now is with conventional financing and for $5K less than what we had originally agreed upon (my private lender was a family member who was growing increasingly nervous with the situation)

Commonly insured by FHA, it involves no monthly payment and the deferred interest accrues to the balance.

It would probably be best to just have commitment, if you are holding the money, usually there is interest accruing.  

He lets it accrue.

There is very little reading on the subject (for Canadians), which deepens my curiosity. 

Perhaps you may need to refine your approach and say a lot less than what you're saying and try to get people to just call you back out of curiosity and THEN try to reach your end goal. 

Hi all,out of curiosity, has anyone obtained multi family units using lease/puchase options.

Interest will accrue, but not compound.

The answer is yes, the question is do you want to (i.e. is there any equity, how far behind on payments plus lawyer fees accrued interest etc..?).