You end up fine for those five years (assuming my restaurant doesn't go under) but if I leave when the lease is up you are now stuck with what is effectively a $500K property for which you paid $750K, and you'll be unlikely to get a tenant who is going to come in and pay above-market rent.

If the seller is fine with their second mortgage and 105% financing, what other sources could I use to get that first mortgage?

Welcome Jessica,Two years sound just about right. now its cash time.I think you guys will be fine.

Non-compliance comes at a dear price; loss of freedom (jail time), liquidity (fines) and rights to practice business.

It is fine to flip, rehab, lease to own or whatever, but it is not a lasting investment, it is a cash flow business like any other.

So, now, you are forced by circumstances to not live in that place anymore, and can't sell, or can't sell without a huge loss, and can't rent, so still must pay the mortgage, dues, fees, asssessments, fines, and insurance and taxes, r&m, etc, on that house, too, you may find yourself in a tragically untenable situation.

When painting a rehab I always use neutral colors, the types you describe are fine.

Both are fine.

This might be obvious to most but its worthy of repeating...Using the 50% average approach is fine when trying to qualify deals that you potentially want to participate in, but it is not meant to replace due diligence.

I read some things on that particular "system" and the reviews werent good, but mostly for customer service issues and people not reading the fine print.