@Christian Carson Hi thanks for the rule of thumb.  

I posted a couple days ago if it was possible to use different financial methods to obtain a traditional commercial loan but is it possible for someone to start off in commercial real estate with little to no money ?

It will not happen with traditional lenders.

@Chris Purvis  even if a HML was not recorded you would still need a contract and you would use a title company and a traditional settlement.

Welcome to Bigger Pockets Christian .

We eventually settled on $145,000 as a purchase price and our bank (didn't know you could buy a house without a traditional mortgage) required 25% down.

You could go to a traditional lender and get cash out refis...probably up to 4 without any issue, as you've found out.

I think just trying to do a more traditional 1031 will be the way to go, if it works great, if not oh well.

You have to keep in mind that if your going to be holding the property then obviously whatever you can rent it for will dictate how much you can afford to pay her monthly out of that rent just as if it was a traditional mortgage.Cheers,Hopefully this will give you some creative ideas to try.  

My only concern would be that I'm not quite sure you're going to get the appreciation (i.e. the equity capture you mentioned above) in townhomes.Historically, they just don't seem to appreciate anywhere near as much as traditional SFH's.