So, in your case above 5.5% would cost you 3% or so of the loan amount (the exact number would depend a large amount of factors about the loan and borrower) to deliver that loan to the investor. 

We have our own personal home, but are interested in the idea of having some rental properties to generate additional income and build wealth. 

The common area language should dictate that personal items are not stored in common areas, it may also address maintenance of those areas, but you will need to amend it to address outdoor furniture and grills. 

If they owed $200k they’d still have to personally buy at least $500k.

Have you seen the completed home in person? 

I have access to others of like mind that can help me put syndicates together to purchase larger apartments.Outside of real estate, I'm busy as a CFO to a large dental practice that my husband owns that brings in capital for us to invest in RE... and I love taking care of my girls that are 16, 13, and 9 and teaching them all about passive income investing via RE.

It's much if you can see the property in person. 

This will be subordinate to the existing FHA loan, but you’ll need to qualify based on your credit score, income, and debt-to-income ratio.Home Equity Line of Credit (HELOC): A HELOC could also be an option, offering flexibility in how you draw and repay funds, though it might come with variable interest rates.Balloon Payment Loan: This type of loan can offer lower initial payments with a large lump sum due at the end of the term.

As far as financing - I personally like the local banks.

Mostly what I see in your price range in my area are condos, tons of condos for sale.