thanks another title agency confirmed that you can do this with a trust deed and promissory note said other agency must not want our business 

If required by the state, always be sure that the agency is fully licensed.

This quasi-government agency will be paying the rent for them so that is not an issue.

I am having everyone sign agency documents  (including my wife... that was in the study materials for the license exam!)

I would like to recommend you to the agency I'm with. 

Kudos,Mary Actually he can he can do a conventional first mortgage at 80% through any bank that funds agency loans sold on the secondary market to fannie mae and or freddie mac and stack it with a 10% second through TCF bank and have no monthly mortgage insurance.TCF Bank:1 or 2 units maxmust be primary residencemin 700 fico middle scorerates as low as 4.24% if your combined loans are 89.99% LTV then its 5.24% (1.99% + prime) interest onlyMax 18%adjustable monthly, payment interest onlyOption two is he can use a conventional MCM mortgage if his income conforms with local median incomes and if he is a first time buyer you can buy 1-4 units as primary with only 5% down (subject to MI company) and potentially no MI if structured correctly.

The lienholder was a state government agency.

The fact that the units are shared doesn't necessarily change anything, although I suppose it's possible that some insurance agencies might deny someone if their "safe and secure" storage consists of shared spaces.  

If you're looking for other payback, let a collection agency take care of it, IMO I'll speak to accounting matters but I don't give tax advice, let Steve, the tax guy, address that, if he will.I need more coffee

I am brand new to real estate investing and outside of deciding to hold onto our home in Colorado and turn that into a rental property I have no experience.I currently run a product development and marketing agency.