I know with mine the payment is considerably higher because it is a percent if the outstanding balance instead of amortized over 30 years.

I suggest you don't buy a property for $75K with an outstanding $95K lien without a plan.

Servicing includes the receipt of any money from a mortgagor that is applied to the outstanding obligation.

So, for short sales, just offer what you're willing to pay (actually, offer 10% less, so you have some negotiating room when the bank counters).As for private transactions, the more information you have about the seller, the property, any outstanding loans, etc, the better negotiating position you're in.

These prepayment penalties did not kick in if you did not exceed 20% of the outstanding loan balance.

Obviously the rates and terms are better for you but the portfolio lender only makes money when the loan is outstanding and if they think you are only using them as a hard money substitute (a much cheaper substitute) as a bridge to conventional financing they will not want to do the work it takes to find the loan for such a short time.

What if your family member died--would their heirs know this loan was outstanding and would they have known how to collect it?

You seem to be well on your way to being an outstanding young man.

Banks when underwriting Home loans look at a lot of factors Credit Score, Debt to Income, total outstanding Debt etc. 

I'm pretty sure I could hit the following rents: 1/1 - $700 (I could get tenants in immediately)2/2 - $1150The property has a partially finished basement with one extra room on each side, but I've been told these cannot be included in sqft calculations as fully finished.Comps for this area in the past year are 1/1 & 2/2 sold for $203k across the street2/1 & 2/1 sold for $201k next door (my current property)2/1 & 2/1 sold for $180k two doors down2/1 & 2/1 sold for $245k one street overGeneral financial information about us: no outstanding debt besides our current mortgage$80k + $50k income (not including rental income)$20k savingsQuestions: 1.