You would be better off buying a bar of gold and burying it in the back yard than borrowing hundreds of thousands of dollars, dealing with tenants, taxes, termites, and toilets for only $100 per month.

Scenario:   Borrower purchases property and I lend at 50% ARV. 

@Simon Li  Most lenders will determine how much you can borrow based on your income. 

If this happens we would then borrow the money from the investment account, pay cash for house "B" and then cash out refi that one to pay the investment account back!

That being said,  if a borrower is not performing as agreed and stops communicating with us, then we have no choice other than to foreclose.

Recourse means that the borrower needs to personally guarantee the loan.If you're looking at multifamily properties, many investors like to use agency debt (Fannie Mae or Freddie Mac). 

I know some real estate investors that want to borrow money from me from rehabs or down payments on their projects, but I don't have the proper documents to protect my investments.

If you are the buyer, look into it and if it’s 15-20 years, it may be on borrowed time.

I would also need to come up with a down payment of around $11k, maybe borrowing from my 401k.Scenario 2: I sell my old home, net approx $100k after commissions and then put down on the new house.

If you have good credit you can borrow from banks to do your projects.