The danger I see here is listing the property as a  traditional sale and having it end up short, which is definitely info you want before listing. 

(1) This isn't "traditional arbitrage" - Arbitrage is where you lease then sub-lease a dedicated unit.

A conventional loan on the other hand will still have traditional requirements and will have Private Mortgage Insurance (PMI) which is similar to MIP but a little lower and only sticks around until you have reached 20% equity. 

Look into various ways to fund deals (e.g. your own money, traditional financing, hard money, private money, partnering, seller financing, etc.). 

Traditional 30 year fixed-rate mortgage How did you add value to the deal?

It is a great way to diversify your portfolio outside of traditional stocks and bonds and can be attractive for their strong dividends and long-term capital appreciation.

Im looking at a portfolio acquisition and intending to perform through a step acquisition of the LLC as opposed to going through a traditional purchase.

Use a Promissory Note and Mortgage or Deed of TrustIf you’re familiar with traditional mortgages, this model will sound familiar.

The concept of borrowing against your own Cash Value seems like borrowing from yourself so just curious how a mortgage lender would view these funds compared to say taking your downpayment from a traditional savings account. 

Eventually, you’ll either sell or turn it into a traditional rental.