It appears that because these loans are structured like a typical loan (i.e. there is no “final” distribution of pre-tax retirement funds) I don’t think there would be any tax consequences.Mark Flynn CPA

They are converting an commercial building into 10, 2/2 apartments that they are advertising for rent (pre-completion) for $1400/mth.

I have done everything from sheet-rock to hardwood floors to roofing and plan to fix my first properties myself with the help of my brothers until I get the ball rolling and can afford to hire contractors. 

The marketing and types of motivated sellers in Hawaii are basically the same as elsewhere - pre-foreclosure, probate, absentee or out of state owners, divorce, etc.

A 30 year mortgage with no pre-payment penalties makes the most sense in our minds now.

Should I target pre-foreclosures and call the owners and explain what I do?

You might be able to do some sort of commercial bank lending if you can show 50% or more pre-leases on your commercial and the numbers all make sense.This strategy could work for any of the lenders above.Bottom line, there has to be interest in the resulting spaces to interest the lenders and the developer, or the developer has to front the entire cost.Possibilities: if the town wants to revitalize itself, it can create a corporation to hold the buildings, and then offer to back the developer of the properties (public/private partnership)The town could hold the properties and issue bonds for revitalization, then do a master lease to a developer/Property Manager to recoup it's funds.

Here in NJ property taxes play a huge roll too.

@Dakota Mivshek Generally speaking, pre-fab modular residential buildings won't save you anything compared to stick-built, except, generally speaking, time.  

Once that's rolling along solidly, I'll be ready to look at other options.