I don't think its a good idea if you can go conventional. 

If so, what's the down on a conventional loan?

The conventional lenders I talk to don't want to lend on Sub 70K houses.  

The loan looks like a private money loan as those loan terms are not conventional.  

It's my understanding that after about 3-4 places, most conventional banks will be quite hesitant to loan any further.  

He will purchase the house  with 5% down conventional loan.

Since right now inventory is so low( I don't really understand why we have low inventory though) I don't think there are a lot of subprime behind the payment like last 2006, which caused real estate to crash and there are a lot of cash buyer from foreigner.

I am trying to purchase a house using a conventional loan.  

Hi BP Community,What is the ballpark cost for a buyer of a SFH, financed deal (conventional) in the city proper closing around March timeframe?

You can't hang with the big boys (whomever they are to you, this is a relative term).You can't make the same moves as the big boys, they are evaluating deals and taking into account variables that you don't even know exist.They have tools in there inventory you aren't aware of, they can exit deals easier and with less loss than you and they can turn marginal deals into better ones.Warren Buffett purchased shares of banks during the crisis.