to simplify, here's what i would do: don't borrow private money, or partner, until you have a track record. 

@Brett Riemensniderif you use a HELOC for the down payment + financing for the rest that is VERY expensive borrowing. 

El Paso cash flows beautifully with minimum down payment and has plenty of choices.

HUD 4000.1 (I believe) is the latest HUD handbook and it goes over all requirements for originating the loan, including but not limited to occupancy requirements and exemptions.FHA occupancy : "At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year."

But tuned out to be a pretty nice profit deal for us about 650 to 700k net in less than a year.the lady got her home back free and clear and I told her do not Borrow against it ever again her kids had forced her into last time and of course took the money themselves.

This doesn't come cheap--these folks were making high six to seven figures depending on volume.We focused on lending to professional real estate investors--so our customers were frequent repeat borrowers. 

Are you averse to borrowing/leverage?

As far as rate is concerned, you can usually go about two points over the current rate (less closing costs for a seller financed deal so there is no real expense there) You need to make sure the borrower can cover that.

In my mind if you need to borrow money for these kinds of services your simply under capitalized and taking on long term financial risk. 

One said the 2nd mortgage has to be assumable and the other said it did not.VA issued Circular #26­24­17 back in August to try and clear up the issue:Assumability: If the secondary borrowing is not assumable, the holder of the VA guaranteed loan should counsel the assumer that this may restrict their ability to sell the property to another creditworthy assumer through an assumption in the future.The lender currently servicing the loan still can decide whether or not they'll allow the 2nd.You could do seller financing for the gap and then refinance just that amount with a Home Equity Loan or Line of Credit at some point down the road.