Any advise for dealing with a private lender?

This is definitely not advisable.

He advised that the owner is willing to hold the property with a down payment if I am willing to pursue the separation of the deeds.

But it sounds like in this case they're about to come into a great deal of money, and you might only need like $10k of that money to get your first flip off the ground.But my friend, please do not advise them to lease option.

You can go there and see but I would not advise that. 

With all due respect, if you have been financing for 14 years you would realize that you have just advised someone to commit FRAUD.The silent second needs to be subordinated and transparent to the 1st lien holder or it's FRAUD.

Any advise would be appreciated.I think that the house has been trashed by the previous owners of the property.

I'm licensed in NY and would be glad to assist you but I should advise you something in advance---any broker that is willing to "share the pot" is doing so in direct violation of federal statues (specifically RESPA) covering a majority of residential transactions.

He advised me to get the ball rolling which meant to start reading everything within grasp and go take the NC Real Estate Provisional Broker's class.

If so, that can be done too.Of course anything over 80% will either have pmi or a little higher rate.Rate and cost cant be determined until you advise what your goals are with the property.