You are however putting junior lien holders at a higher risk and your state regulators may require that you carefully qualify your investors.

So, I believe a HELOC was taken out to finish the basement.The bank approved my offer within 30 days (incredible) but the deal almost fell through because the 2nd lien holder wasn't notified of the short sale.

Purchase a $1m, decreasing term insurance policy for 30 years and make him the lien holder the beneficiary.

I am wondering if i would need to either obtain work visa authorization to travel to Canada and maintain the properties, or if there would be some way to gain citizenship/permanent residency through these investments.

If the property is worth less than the 1st mortgage, it may not sell at auction unless the lender agrees to accept less than what is owed, in which case the 2nd mortgage holder will get zip.

They cant answer how a mortgage holder & a leasee not be evicted from the property if an NOD or foreclosure comes up!!

We are thinking of creating a separate LLC or LP as the investor entity that would provide funding (and that would probably be a second position lean holder on the property).

Showing the docs of the transactions will evidence the rights of the new holder, not a big hill to climb.

If money is passed through to seller for insurance, is the seller the policy holder or does the seller make the payment on behalf of the buyer/policy holder?

Sorry, failed to mention that we guaranteed payments and had the right to step in the shoes of the note holder, secure the collateral and dispose of it paying the amounts remaining.