.-  If you still like the deal, perhaps lock it up with an inspection contingency and then get a good inspector in there to take a look.  

But being locked out of our equity is much more of a headache 

One alternative might be to give your investors a preferred return, and a locked in profit split for when you sell... do you think promising a preferred return would create problems for lenders?

I’m locked in at 5.65% right now on a conventional 30yr fixed. some more details that may or may not help:Purchase price: $50krehab amount: $30kinterest amounts to $4ktotal $84kappraised value $200kprimary conventional fixed 30 yr.

I have heard many people talk about moving assets to an LLC after getting financing; although this could trigger a due on sales provision, it sounds like it rarely does. 

Values may adjust down in certain areas but people are not going to walk away from homes this time around since payments are locked and affordable.Rates are up a bit but elect to do a buy down or go with a Hybrid ARM 3/1 or a 5/1 it can make sense for an investor, especially if your going to refinance in 6-12 months to pull ut cash anyways.

Put electronic locks on all the doors including the front door to the house and your own room you use.

I have more locked up.

Aside, what I don't know (and would like to know if anyone has tried it) is what happens if the companion unit is attached to an existing duplex - not sure whether that would trigger commercial requirements (MEP plan, fire alarm monitoring, etc). 

It seems pretty common place to just lock in the fixed interest rate with the expectation of eventually refinancing to a lower rate.