The latter process would take more time (due to capital generation from other sources), cash investment and end up with much less capital appreciation over time but would also carry much less potential risk. 

Like you mentioned and what I've read is the deal structure and sponsor carries the biggest risk so thank you!  

SHORT TERM OWNER FINANCE - Ask the seller to carry the note for 12 months until you can owner occupy. 

The client is seeking a minimum of $3,750,000 to pay off the first lien, but would prefer closer to $4,500,000, which would provide a few months of interest carry prior to the potential new tenant taking occupancy.

@Brody VeilleuxHouse hacking and BRRRR (Build, Refinance, Resell, Reinvest) strategies are effective for property acquisition, but they carry risks like delayed refinancing, increased debt, and property management complexity.

The uninformed will fall victim for sure.Lenders of all types should require title insurance and also obtain Insured Closing Protection Letters -- the validity of which can be independently verified.

The letter grades are subjective and really will change from person to person.

(I had additional carrying costs from a HELOC, which meant I walked with around $45,000) What made you interested in investing in this type of deal?

Even with the new retal income lenders are denying the heloc due to the tax balance despite providing copies of the agreement and letter from the department of revenue which says I am current on the agreement.

This project carried with it a estimated $97,000 rehab estimate as well; another huge cost.