I'm just throwing this out there to see if there is a need.

The Hardmoney lender will need ballooned out at 91k in 12 months. 

One condition of this grant is that we cannot sell the property for five years, and if we refinance, we can’t take any cash out—it must be reinvested into the property.

@Jay Hinrichs Developments are definitely BIG money makers, but thats also reflected with the risk associated.That's why these projects take so much time and capital, but if you make the right judgements for project selection, and do all your due diligence, it'll turn out well.

The title search is definitely a good idea so you don't find out about other liens on the properties after it's too late.

That would hurt the existing tenants who get kicked out! 

Woody's business started at the time he purchased the 1st property or at the time he held it out for rent, because, in any event, the expenses in question here all occurred before the purchase date, i.e., before December 30If the earliest possible date investor was actively carrying on a trade or business was December 30, 2004, then any expenses incurred in that year but incurred “before the day on which the active trade or business” began, all the expenses incurred from January 1 through December 29, 2004--would be, by definition, start-up expenses whose deductibility, and possible amortization, is expressly dealt with by section 195 (Start up amortization).Court case for reference: Code Sec(s): 162; 195Docket: Dkt No. 30077-07.Date Issued: 04/30/2009Judge: Opinion by Gustafson, J.Tax Year(s): Year 2004.Disposition: Decision for Commissioner.

I would find out their DSCR ratio and make sure you can hit their minimums either upon purchase or when they desire those ratios (maybe after stabilization in a year or so).5) Unit Turns/ Re-Leasing.

Do you think this type of financing is a game-changer, or are there pitfalls to watch out for?

Someone suggested we ask them to be out by Oct 1 so that we get a new tenant before the holiday season.