This is not going to happen.....find a different, more realistic solution.Attorney time, maybe a Partiton suit, where if you guys can’t agree on a buy out between yourselves, the court sends it to a public auction.  

We've been working on bylaws, registered as a non-profit, set up a bank account, drafted application forms, discussed membership fees, and a whole bunch of other stuff.

Once you have spent many years dealing with people and working with the public, you pretty quickly get a good feel for a person - if you don't, you better get a good property manager or you'll be shook out of this business quickly. 

I have noticed over the last 2 years or so that there's more applications from people that work from home or have other non-traditional jobs, and I live in a pretty traditional area so it's not like a coast vs. flyover thing.

Obviously every house won't be a winner either so when we don't make much money, I won't still be on the hook for paying say 10% back.This investor wants to sign a 2 year deal with me, and non-compete so I can't use other investors money or go do this on my own. 

What are you seeing out there now with regards to loan terms for non-owner occupied, small multifamily properties (1-4 units)?

I am referring to using 401K and setting up a Trust with a checkbook account.Lenders will require more down I realize.  35 - 40% and I will be working with portfolio lenders and non-recourse loans.So my plan is to work syndicated commercial deals where you get your money back out in 6 - 12 months. 

But what kills is that FEMA levies a $250 flat fee, on top of the insurance amount, for non-owner occupied properties and/or multi's. 

I avoid giving specifics on non-credit/income denials. 

Almost half of my portfolio has Section 8 tenants in it and as non section 8 people move out i try to move in more Section 8 tenants but i make sure my property manager screens them THOROUGHLY....not with just what's on paper regarding credit report, income and past criminal activity (If any).....I make sure my PM screens to make sure they have no pets, no evictions, no smoking OF ANY KIND and no felonies and we still get TONS of people calling...the biggest problem becomes picking someone from who is left.