Get tight with your go-to lender about what will happen if suddenly all your rental income shows up passing through your LLC showing up on Schedule C, and not Schedule E, if you use fannie/freddie conventional mortgage loans, and not hard money.

She is saying that she needs about 2-3 years to get her credit in shape so that she can refinance into a conventional loan down the road.  

For properties going under $100k, you are going to need a 203k renovation loan -- FHA or conventional alone won't do unless you get a turnkey condo, but that's not the plan.

But it seems that it is quite easy to get conventional mortgage loans on the first 4 properties so do that if you can.  

You can do FHA if you plan to rent a unit (3.5% down) or conventional.  

I didn't want to deal with FHA, or put 20% down, so I have one conventional loan and a HELOC on the property.

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.