Due to inexperience opted for a 10 year loan which is going to clear in 4 years.

It would if you refinanced a smaller loan later though. 

Conventional Condo loan requires replacement cost vs ACV.  

Here's a casein FL - Seller in foreclosure has 120k principal @4%, Shes 10k in arrears, house is worth about 250k, good condition.She wants to stay at the house, but doesn't mind selling it if needed.She will likely not qualify for a loan mod at the moment, good amount of equity.She works in the medical field, just took sick and fell behind.I was thinking of offering to pay her 10K in arrears and creating a 2nd mortgage @ 10% interest.if she defaults, i can foreclose,  as there is a bunch of equity there.any thoughts of a better scenario that i can make more of this situtation?

My plan is to pay cash and wait until interest rate improves, then refinance and pull out $150k for a down payment on a second property.

I smell a refi in your pipeline a year or so from now, remember this isn't a home loan, so "two years of tax returns showing a profit" is NOT a hard/fast rule at all to get the best terms.

You can use rental income from other units to qualify for a bigger loan amount => higher purchase price.Hard to find in decent areas, so you'll be tempted to buy in Class C or even D areas.

I have been doing work to improve the side that I am living in, including finishing the walk-out basement that adds another 2 BR and 1 Bath. 1-1 rate buy-down gives me a 24 month period refinance at either a lower rate, or at a higher value (forced appreciation from improvements).

Both to scale better, and because it gets me into a price point where the asset is underwritten more than the borrower, and non-recourse loans are easier to find.There are not a ton available, and those that do hit the market have not piqued my interest. 

We have a 7.125% rate on a 250K loan.