HI Chris,Yeah the option would be to utilize a 203k FHA loan or a Fannie Mae Homestyle renovation loan the only down side is that the FHA 203k similar to a regular FHA loan has self sufficiency requirements on 3-4 unit properties so if you're in a area where rents are high relative to price then you could be good otherwise you might not be able to meet the rule and use 203k to finish off your repairs to the unit.The other downside is if you used home style reno loan is that you'll need 25% of loan to cost as a down payment (acquisition price + rehab).With the Home possible program the units have to atleast be habitable shape.

The house is 3 level but the basement is not finished, it has a walk-out, electricity and AC, plumbing rough-in for full bathroom - in fact it used to be a fully finished basement but everything was told bare due to water damage a few years back.

@Mark Allen and @Mackal Smith thank you for taking the time to reply, I appreciate your insight.I agree with both of you, I think underwriting the deal using IO only isn't the way to go, as should anything change in the market and I'm not able to get the rent bumps I thought I could, when the IO finishes id be in a lot of trouble.Sorry for the delay in replying.Barri 

Contractors are more likely to finish within that timeline so they can get paid.

So year 5 you're at $500K and if you participate in the next fund that also has similar projected track record you would end up at year 10 (from start to finish) at $1M. 

I can show them from start to finish a system where they learn how to find, fund, rehab, and sell a house for profit.

By the time you finish that, you'll be well-versed in a host of different techniques and strategies and will be better suited to handle the first deal when you find it. 

I have a friend that is finishing his rehab on a duplex in Fairbanks right now.  

So I kept his rent the same for 2 months until I finished remodeling and finding a tenant for the lower.

I also just finished a mini marketing campaign that yielded some possible results for an FHA house hack.