This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

With $50K and a DSCR loan, your budget will likely cap at properties in the $150K-$170K range, depending on the closing costs and any repairs needed.

I have two rental properties through the VA loan being military.

We don’t have an immediate need for the cash and current rates are attractive, so would love to hear what the pro/cons of seller financing are in this situation?

Quote from @Sri Reddy: We are a team who are venturing in to constructing a multifamily unit from groundup.We don't have any prior experience in construction and are looking for financing loan options.

However, my debt to income ratio with that home loan, and student loan doesn't look that great currently and I don’t have much for a down payment.

Question: Should I collateralize the loan (if using private or hard money), or rely on roll-over loans (to maximize the lower points and 3-4% rate)?

The Note/Mortgage for each loan states the dollar amount invested & the % of the total loan by name, for each investor. 

He works with us often here in Chicago, but can service loans across the country!

Your son will be forced to sell or refi, and I bet you that this deal can't handle that situation.