With the cost of utilities and the level of comfort people feel is mandatory now there is no way I would want to be on the hook for it. 

I think the before vs after pictures really speak primarily to your experience and ability to execute a project so it can help lenders gain comfort with future projects and allow you demonstrate what level of detail you except out of your contractors.

Quote from @Michael Challenger: I have no qualms with hard money lending, but I need to learn more about the process and structure to these for typical deals so that I am more comfortable and in a position to reduce my personal risk and risk to investors as much as possible.

It will include a compact bathroom, a tiny kitchen area, and a heater—just the essentials to make it comfortable for someone to stay in.

Just make sure you’re comfortable with the interest rate if going either route.  

I like to look for locations that are good, and that I’d feel safe and comfortable living in if I was a single woman with a couple of kids.

@Zach Denny - I agree - chances are the institutional lender won't be comfortable with an owner-financed 2nd and 100% combined loan to value.

A child gets exposed to fentanyl in the property, CO poisoning, or someone gets shot in the property and then landlord gets sued.

Get out of your comfort zone.

And the locals in Highlands have been fiercely debating STR's and regulations for the last few years, so I wouldn't be comfortable buying there.