Just because the definition of Loan Originator has not been nailed down yet, and there is hope that the MHI Dodd-Frank Task Force may be able to get favorable changes does not mean you should wait to deal with Red Flag, Safeguards, et al.

I know that's not exactly your question but their reasoning (to favor REI versus 401k) may be helpful in understanding the pros/cons of each.

Since the property is in A+ condition it's doubtful they will make any deal that is not strongly in their favor.

I know that scenario is not accurate in terms of a true estimate of cash flow, I just wanted to keep it simple to exemplify the staunch difference between all cash and leveraged cash, I apologize.I guess my real question is how to approach private lenders/investors I know and sell them on the idea of lending money, secured by a property of course, at a lower rate than I would get from a hard money lender and at more favorable terms regarding the loan length.

The number look fantastic on paper, but the reality of the market in terms of economics, infrastructure, demographics, etc are far from being in your favor.

There are also properties from homepath.com that are available first only to owner-occupants w/ 5-10% down, although they seem to be priced a bit higher than market because of the favorable financing.

They spend too much time on the house and not enough time on the seller, their motivation, and planting doubt in their minds about their asking price.Do me and you a favor--buy Bill Guerras course "How To Talk With Real Estate Sellers."

It seems like such a loophole in favor of the tenant that because they haven't paid rent and we want them out that they avoid the whole termination clause.

And black is black...beiges tend to go in and out of favor, pinkish 80's, golden Tuscan, greige grey briege 2010's.  

I have a background dealing with the less than desirable types, so this area might be a niche that may work in my favor.