I make a decent salary for the Bay area, have a good amount of savings and don't have many expenses outside of rent and student loan payment. 

Getting someone else to give you there house so you can profit from it is a difficult task, but a couple points you can make to sellers, depending on their situation, to help them see your point of view and want to do the deal are:- Earn Hassle Free Profits- Get Multiple Pay Days- Sell your house with No Commissions- Rent your house Without being a LandlordThis all stems from the strategy of the Seller receiving an upfront Option Payment, Monthly Rent Payments to cover their PITI, and Profits when the property Sells.  

The individual has a large down payment, 15k+.

I'm okay with it not being positive cashflow immediately but, I am also trying to keep my monthly payments down as much as possible.The main reason I'm moving to NJ is because finding multi family units there is actually affordable to me, rather than NY which is out of reach for me at the moment.

I know there are ways without having to put a lot of money on a down payment but my credit isn't where I want it to be and I'm barely getting by on my job.

Would a private money source fund a down payment on a buy and hold property?

If feeling bad for her effects your business decisions you are in the wrong business.Her health and past payment have nothing to do with making business decisions.

Also the loans allow us to pay them off early, make minimum payment for 30 years, or refinance if we choose.

In the unconventional lending world there is no specific period you are required to wait to be able to refinance based on actual appraised value, which means you may be able to refinance and cash out your original down payment funds and potential lever equity immediately following rehab completion and tenant placed.  

Anyone have any experience doing this and if so how would you suggest best way to structure deal, clauses, down payment, etc.