I was intrigued by how this rate differs from something more traditional (~4%) when looking at "analysis over time." 

For example, buying an investment property in the traditional way means you put 20% or 25% down type of thing. 

AND your rate is WAY lower on your traditional primary home loans than using an acquisition loan (on your BUY step)...not to mention the extra costs on the REFI step. 

When dealing with traditional sellers on these types of properties you typically have an option to cancel if the property fails to appraise, especially when financing, that forces the seller to return any EMD monies if they are unwilling to accept the lower price and you cancel the contract.

I have also read that many of these loans are structured as 5-15 yr balloon, but they will do longer, more traditional terms without balloon payments.

The hard thing with this is if you did not include your renovations on your HUD then you will not normally be able to do that with a conventional type loan.Now if you wanted to go outside of traditional banks then there are many lenders that will cash you out up to your purchase and renovation without renos needing to be on the HUD. 

Under contract on 17 townhomes sold as a pkg and having trouble going the traditional banking route.

@Christian Bors I doubt that there's a wrong answer and there isn't just one answer either.  

My thing is that here in my area everything is very traditional.

Traditional MLS listing?