I look at the cash on cash return and it is not a whole lot higher than my single 5BR house but that's apples to oranges I guess comparing a 30 year mortgage at 3.75% to a 20 year at 5.25% or whatever commercial is going for now.  

Go to any open houses in the area, and see exactly what the product is that they're offering, materials used in finishes, etc. so that you can compare apples to apples.

He then received the same $104,500 of principal back ( worth $80,000 today) and has $20,000 in cash left ($100,000 sale price less the $80,000 note purchase price) or the same $14,500 more than if he provides owner financing.Always compare apples to apples.  

With prices here, most CA borrowers don't have this problem, even now in the Inland Empire and Apple Valley.Rather than rewrite it or quote, you might check out this related thread which outlines many of the questions you could ask an HML and a few ways to ensure they are honest.  

And it certainly is apples to oranges from SFR's... but the concept is the same you have 1st position collateral your in the business your local commercial bank is in the business of funding their community investors..

Also I want a full SOW/line item quote so I can compare "apples to apples" when getting multiple bids.

If you are comparing your home to your neighbors, apple to apple in terms of same sq ft, layout, style, etc. - then I would imagine you'd get more than $280K with nice upgrades...

Further analysis should be done once I weed out all of the bad apples using the 50% Rule.With my current deal, although in the short term there will be a negative cashflow of about $150 - $200 /month (mostly because of PMI), it is still a favorable deal for me so far.

They will also give preference to owner-occupant bids over investor bids if they are apples to apples.They will not necessarily go with the first offer.

I think the biggest mistake some people make when trying to make an apples-to-apples comparison is that they do not put a fair value on their time.