Banks are still giving money out, lots of borrowers have reserves, and banks have financial instruments to lock in their cost of borrowing over a certain amount of time.

The mortgage or deed of trust is the security instrument that pledges the property as collateral for the note.

Which instrument will you be using to control the property - you may do a lease with an option, you could do a purchase agreement and close with a mortgage and promissory note, etc. 

Darrick P. as many suggest get a party involved that knows what they are doing which can be a licensed originator and/or attorney.In the interim to give you a better example of a better instrument you can always review what the big boys use (Fannie Mae/Freddie Mac) here is a link, you would review the Multistate Note.http://www.freddiemac.com/uniform/doc/3200-MultistateFRNote.doc

I never listen to the radio or music in my car.

Fill the house with haunted mirrors, creepy dolls, vintage music boxes, china figurines, photograph them in place, and you can rotate new  furnishings in an out every few weeks as you sell the old ones on eBay.But the bulk of your revenue is going to come from Airbnb, where you will loudly and proudly advertise your haunted house experience.PEOPLE WILL COME.

A first mortgage is in first position as a lien with all the priority rights as stated in the mortgage or deed of trust instrument, subject to property tax liens if any.  

I appreciate your feedback as it has been instrumental in helping me make a well-informed decision.

While it isn't necessarily a bad way of calculating your actual return, the return on equity is a better instrument, because it takes into account the equity trapped in your investment and compare it with your gains or loss.

You need to decide if there's still more to be made or if you're about to be the guy holding the bag when the music ends.How do you plan to do sweat equity from several states away?