My downstairs tenant pays most of my mortgage while I live basically rent free.

Our plan is to buy the first home in cash, likely $550k-$650k, operate it under management for 3-6 months, then refi to pull out what we feel the property can support for a mortgage so we do not end up upside down. 

She mentioned buying a place closer to where she lives now and using the money as a 40% down payment-so it would be more expensive and she would have a mortgage.

The most obvious is that you will be able to offset your mortgage with renting out a few rooms.

And if something effect mortgage finance to in effect be 6%....... could see record shattering first 30%+ price jump in 1 yr....... 

The response was that they paid a guru to teach them how to do 100%, 2nd mortgage financing to real estate investors for purchases and down payments.

Should I pursue a commercial mortgage on the third property or pull equity out of the second property that I own free and clear?

I know it doesn't affect your mortgage payment already.

My goal: create an interest-free loan which is appealing to a potential homebuyer, yet doesn't make too big of a discount on my end.For example: If I sold my $300,000 house with 20% down ($60,000) over 30 years, at 6.7% interest rate: $1548.67 principal and interest per month1548.67 x 12 x 30 = $557,521.20What I would do would offer a lower monthly payment and no usury, but it would effectively be like a prepayment penalty.Arbitrarily, let's say 20% off the monthly payment, or $309.73 less per month: $1238.94 monthly payment.House would be sold at $446,018.40, which is $111,502.8 less than the total paid with a normal mortgage, but $116,018 more than the market price.

A mortgage loan officer?