Yes, it does require a little more paper work with the FHA, need to have the 203K Consultant involved and handle inspections/appraisals and such, but the fact that I can get into a property, have up to 6 months of mortgage payments included in the cost of the loan so that we don't have to worry about double rent/mortgage payments, rehab my primary residence the way we like it, save a 1930-1940's era farm house, and then refi into a conventional cash out mortgage later on and use that equity to go buy rental properties.......nice way to get started, without having to put up a lot of cash or live next to tenants/in town (I'm a RURAL kinda guy).

What legal documents do you typically use with sandwhich lease options.I had my lawyer write up documents for wholesale lease options, but how will the paperwork for a sandwhich lease option be different?

There are so many tidbits that are essential for you investing strategy.

Essentially you are helping out with miscellaneous errands and learning in the process.IMHO, It is very unlikely that you will find an investor to fund your deal if you have never done a rehab and do not have any of your own funds in the deal.I am not trying to rain on your parade but just want to prepare you for some of the challenges of getting started with no funds and no experience.Keep asking questions and you will find great assistance right here.

2 - Going FHA with 3.5% down and essentially repeating scenario 2 but having a permanent cash outflow for PMI.

I am not sure what the rules are these days on borrowing a down payment (essentially a second mortgage).

Ask if you can assist them for FREE in anyway.Believe me someone will take the bait, there is much to do in RE business:Marketing,networking,taking pics of property,meeting buyers,meeting sellers,organizing/interviewing contractors,getting paper work signed,title companies,attorneys..etcLet them know you are learning the business and would be open to mentorship.

(My credit was bad due to the Army/Government screwing up medical bill paperwork) so I was trying to help them feel more comfortable and mitigate some risk by paying upfront.

There was more paperwork for the renovation part and a draw process for paying contractors.

I am obtaining financing for the property.I have all of my paperwork in order and have been pre-approved through my bank.