I am determined to get the work done, and I am disciplined enough to keep going when I hit a snag, and I will be devoted to this one property, or however many I'm working on, until I have exhausted all avenues in my attempt to buy it. 

I also wanted to tell you guys a little about the deal as my wife in tired of listening to me talk about this rental at this point.2 Bed, 1Value: $70,000Purchase: $52,000 (or 65,000 Financed)Down Payment: $0 (Financed)Closing Costs: $3,969PITI: $348Rent: $850Vacancy: 10% (Property Managers say it is only 6% for the area but we want to be conservative)Maintenance and Capex: 8%CoC: 105%Cap Rate: 10.58%The maintenance and Capex sound low % wise but I worked with the appraiser, contractor, and some other resources to create an exhaustive list of all of the Capex's and it came out to about 4.5%.

At this point, you've already exhausted your cash flow and now you're paying for the investment instead of it paying you.

Shouldn't cost you more than an hour with an attorney or legal service to get someone to fill out a standard note and deed of trust.

A new construction house will be work more than an older house, but not normally by crazy amounts.  

I'm also going to be putting away at least $150/month, or more depending on the age of the home, for future repairs.The primary problem with roofs: A 800 sq foot roof on a 30k house is not significantly cheaper than an 800 sq foot roof on a 600k house.

We sold it almost 2 years ago just as the market was turning in our favor, but by then had exhausted savings and had some unexpected medical bills from our daughter that forced our hand to sell it and take the small amount of equity we had.

Now I know that the lender gets paid first, and is in a stronger position than an equity partner.But still, why would a rehabber want to work with a money partner taking 60-70% of profits if they can get essentially the same financing from a HML that will only cost them 30-40%?

You may want to consider utilizing insurance more than an entity.

I was thinking of the owner finance option because of the down payment and a higher interest rate would net more income in the long run than an outright straight sale.