Flips are as good as anywhere, but it's also popular here, and a LOT of people do it already, and I've heard a few sources say that it's become very competitive here. 

Your best bet is going to be through a wholesaler or source your deals directly with your own marketing.

Certainly discuss with various sources as each lender will have their pros and cons. 

Find a bank willing to do this, locate a private or hard money source and purchase the house, then refi into a regular mortgage.I have been purchasing rentals this way for the last 7 years. 

I'm not new to investing but I am relatively new to wholesaling/sourcing my own deals. 

Some will be individual specific like my having two employment income sources.

You asked about the legality, there are federal regulations that employers, sources of income, landlords, mortgage holders and debt holders provide applicants or their lenders with the information to applicants/lenders for insured mortgages.

At some of the properties and knocked on the house next door and talked with the occupants, figured out they are good sources of information.

At any rate, lender guideline would certainly prevent this loan from being marketable in the secondary market.That leaves hard money as a commercial lending source.

I know there are other sources than banks (hard money…etc) but I don’t think I currently understand enough about creative finance to make it part of my plan.