203k loans and homestyle renovation loans are products many banks offer for rehab deals.

I've heard Memphis has good rental deals at low prices. 

If your intent is primarily to hold for productive use then you can use the 1031.  

Ideally my first deal would be a flip in the low 100k range.

The Lowes or Home Depot cabinets that come pre-built are better quality and don't cost that much more. 

Strong ethics.And beleive me in my 20 years of lending in the Turnkey space I can tell the difference between the low character guys and the guys that will stand up and do the right thing.

Commercial loans are generally 20 or 25 years amortization so the minimum payment may be almost as low as a 30 yr conventional mortgage if you factor in mortgage insurance (at least for the first 5 years).

The defect exclusion pertains to defects in construction or products you actually build or manufacture and nothing to do with an unrelated product defect. 

I think the impact would come from the loans that were previously modified at ridiculously low 2-3 percentage interest.It's hard to compare apples-to-apples without knowing which kind of notes the fund you're referring to is investing in (or creating)

I know interest rates are as low as they've ever been so at least I have that going for me.