if the borrower needs more to rehab they bring in their own cash.It appears as well as this could be an accrual deal were if he is lending lets say 70k in this scenario he adds 6 points on to the note  so the note is 74,200  with interest at 12% accruing on the 74,000and at 6 month payoff he wants another 2% of the 74,200 or 1,840... for a total return on 70k in 6 months of 4,200 plus 1,840 = 6040. 

out of curiosity, you say you want turn key because you're out of state.

So, essentially, you have $100k at your fingertips, not accruing any charges (except maybe a yearly fee which is usually minimal) until you use it.

@Nathan Ley It's a newer property so the maintenance expenses (that I used in my estimation) may be high, but you should technically be accruing for them anyhow.

Additionally if the loan has already accrued a year of interest that would benefit you as well.There are two other things to bear in mind.  

During this time I accrued interest without making a payment which kept the holding costs down.  

Honestly, I wouldn't necessarily count on this deal cash-flowing so long as you're occupying one of the units, but I think that your overall return (counting equity being accrued from the mortgage payments) would be positive within about a 4 year time frame.Sure, you have little or no vacancy upon purchase because those leases are still intact, but as a fellow risk-averse person, I think you should run your numbers on both a really rosy potential scenario but also a toughie scenario.

This is a curiosity question for the landlords out there, but anyone can feel free to share their thoughts.

If you are using things like a credit card for materials and accruing points, what happens to those if a breakup occurs?  

Again, it’s based on curiosity and I understand it lacks specifics.