Sub-letting homes gets very tricky, there are better ways to skin the cat, IMO, but good  luck :) 

I was concerned a HML would slow-play draws for DIY materials.....or inspections for DIY are typically onerous, nearly impossible, and it's a lenders way of shaving %'s off their loan to value as a way to get increased borrower skin in the game. 

No one that is successful or intelligent will give money to a newbie with no experience and no skin in the game.

Got a million answers but no skin in the game.

We generally want the borrower to pay $5-10K towards their arrears to have some skin in the game for future performance, and that income lowers our cost basis for the note and boost the annualized ROI.

Your own skin-in-the-game shouldn't leave escrow until it's handed over to the SELLER, at closing.

If she balks at the no money down idea, offer her something...maybe 2-5K to show you will have skin in the game.

I think they were just scammers all along but, whatever.It was emotionally upsetting and I know I will need to have a thicker skin going forward because, the more rentals I own, the more likely I will be to end up court with unethical, horrible people.

Extended transactional funding would cost you a lot of points and so would hard money and most hard money lenders want you to come to the table with some skin in the game so it's unlikely they will fund you if you don't have something to put down.

My other concern on this deal is to offer a four year balloon and end up watching him default on that while having deferred four years of maintenance.I guess most importantly I need him to put some skin back in the game if I want to proceed this way.