I was facing a shortfall in my retirement plans as a result of this change that I needed to make up.

They are all retired and live in Montana and none of them want to be landlords, but they love getting those checks in the mail every month.

People often use them either for or to supplement retirement. - people often use these loans for holding cash used to invest.

If so, as long as those 2 rental properties are cash flowing after all expenses, then I guess it makes sense. 2 rentals won't generate enough passive income for you to retire on though..

It is the owners retirement basically, and the tenants are his longtime friends and he knows we would kick them out immediately.  

I rented my house to a retired military vet, who claimed he knew what clean meant.

They are semi retired, and dont actually 'need' more income than their pensions, SSI, etc...

I take it this is a couple that's retiring or on disability or maybe both.

My approach is different - buy and hold 4-5 SFR, pay them off, self manage, and retire from corporate 20 years early.

There a lot of things you can try.Partner up with a seasoned investor who can front the down paymentFind a hard money lenderWait and save up the 20%Pull equity out of your current house as down paymentTake loans from retirement savings and use as down paymentPull together a good enough deal that the bank bends its lending criteriaFind properties that a bank already holds and is willing to finance for youFind owner financed housesGet a part time job to save up the 20%There are many other creative ways to make deals happen.