I can only imagine that they got a bunch of big time investors and business loans to grow this out.

Loan interest is deductible based on the use of the loan, not the asset securing the loan. 

I financed the deal with a conventional loan and bought down the rate from 7.75 to 6.25.

If it is someone you know you can give them a straight return as if its a loan - can provide a lower interest rate to provide upside - it really depends on the lender and what are they concerned with and what is their risk profile. 

I've also used traditional loans through regional banks and a few SBA loans. 

SubTo is taking over someone elses loan.

And could even get a second home loan if doing traditional financing.

Please, no solicitations.Use the renovation/acquisition loan products that require 10% down on the purchase and you should be able to get a few going at a time.

Its a tiny loan for any institution.You'll have to get hard bids from a local GC, but maybe $110/ft?

And you'll have a solid W-2 income to help you qualify for loans.