The extra, called positive cash flow, is the money you are making.

As in, a 10,000 person town I'd stay away from - you want a reasonably diversified economy...Here's the main concern I have with your startup plan - Inevitably investing out of your area will put someone locally in a stronger position with regards to negotiating. 

People says its a rare occurrence for lienholders to call the note as long as they are getting paid, but they have a right to call the note due in full if they found out the owner sold it to you in a second lien position. 3.

That puts you in a great position when purchasing (as you eluded to).You will pay "closing costs" twice, but not really.

I deeply appreciate any feedback as this totally new for me - I’m just trying to quick build something to scape the rental trap I’m in .

I think you might be better off positioning yourself such that the goods/services you offer are visible to those that might be in need of those goods and services, that way they call you. 

I have never owned or dealt with real estate during the 2008 crash.My question is: Will the lending institutions close their doors on all lending programs or most lending programs during such a time and make it difficult for me to re-position the property (even if the deal was looking great from a lending perspective)?

Also need feedback regarding seller financing versus 203 FHA loan that will allow for extra $ to make the repairs and updates.

Brian, thank you for the feedback! 

Of course, you need to be in a position to buy a replacement property in order to make it work.