There's a reason these people can't get their act together and borrow from a bank.If you work with someone that knows what they are doing and structures it correctly, you can make some good money off this type of transaction but you still carry risk.

that would give you 18 months to fix one up and then sell or refinance. then use the proceeds to fix up the other twoalso consider borrowing from friends or family, and offer the property as collateral

Also asking too much won't help as the new buyer can't borrow more than the house will appraise at.

That said...my long-term goal is to make enough money on a monthly basis to replace my 9-to-5 W2 income I am open to any ideas that may be creative in getting this deal done whether be taking on a partner who has the down payment or maybe borrowing the money from a bank.

Many libraries now allow you to borrow many ebooks or eaudiobooks for free so you can even often read/listen to books for free .As far as the hard money interest rates , those sound like they actually might be points . 3.5 -4 Points would be on the high end today but possible some lenders are charging that much .Points is an amount you are borrowing on top of the interest rate .So if you borrowed $100,000 at 3 points that would mean $3000 in addition you’d have the interest which is often over 8% per year on hard money as others have mentioned .

Basically, it's borrowing money at one interest rate and lending it out for a higher interest rate.

I decided I will no longer borrow money and just pay cash unless they are construction loans.

Quote from @Eric Rich: If you borrow against the equity, that will be another monthly payment and reduces cashflow.

I am considering transferring the properties to a LLC so we have more control over our personal income (take distributions as we need, etc), have more borrowing potential under our own names (liabilities would disappear from our personal taxes), and have more protection.

So as Wayne stated you just made a unsecured note to what sounds like a cash strapped borrower who has probably in all intense and purposes used your funds to plug some hole somewhere else and he does not HAVE the money to give it back to you...