This year I may see if if I can get a construction loan to build 20-30 apartments, then refinance with an asset based lender. what markets?

Both of these allow you to low down payment loans to buy a primary residence with fixed interest rates.

I wouldn’t want to hold the loan for too long, so ideally it would be a 5 year term, presumably ballon payment at the end.

My plan is to buy the house subject to their existing mortgage, renovate the property, refinance it and pay off their remaining loan balance using the money from the cash out refinance.

There is a reason banks don't make loans on stocks.

Did you close this with a hard money loan?

A turn-key provider would be a company that can handle everything from sending you deals that fit what you're looking for, assist in getting you pre-approved for a loan, rehab (if needed), management, and maintenance. 

In today’s market most homes will be worth more than their outstanding loan balance unless they are VERY recent purchases with little to no money down.

Year long lease typically, with subletting allowed to offset summer months cost to tenant.I worked out some high-level math: Assuming there is a 6 bedroom single family house for sale for 800k, and I can rent for 6k/month.Financing: 350k cash, 450k loan @30yr, 3.8%.Assumptions: 7% vacancy/yr, $4000/yr repairs, $10k/yr property tax, $4k/yr insurance, 8% management fee+50% first month rent on new leaseMonth-to-month breakdown: Income: $6000 Vacancy, Mgmt fee, repair, taxes, insurance: $2300Loan PI: $2650I'd take home ~$1000/month. 

The substitute of collateral was more of a scenario where you sold for $155K, and instead of paying off the $88K loan in your scenario, those funds stayed at the title company and were used on a cash purchase happening nearby in date.