Are you investing the $200k and getting 12% or are you borrowing the $200k at 12% and then reinvesting it?

They would prefer to have nothing to do with the borrowing in #2 above.

Was the $187,000 borrowed or did you pay all cash?

(though check with an FHA lender)From FAQ on the HUD website:"To prevent circumvention of the restrictions on FHA-insured mortgages to investors, FHA generally will not insure more than one mortgage for any borrower (transactions in which an existing FHA mortgage is paid off and another FHA mortgage is acquired are acceptable)" (italics added by me)In your case, the refinance you plan on doing will pay off the "existing FHA mortgage", then a new FHA mortgage is acceptable.The caveat.."

I have borrowed against my primary residence and even raised my CC limits in the event if I was to use them.

I have learned that you will not be able to borrow against a rental based on it's market value for the 1st year of ownership (only what you paid for it, new guide lines after crash).

A investor real estate loan has far, far, far more risk.And if you borrow from grandma you better be willing to work two jobs flipping burgers to make the payments if your real estate deal goes south.

As a function of the BK, the borrower/owner would have either had to reaffirm the debt or surrender the asset.

The cost of the lender's title policy is usually a cost to a borrower.

Do you expect to just keep borrowing money or putting expenses on credit cards?