If you need a good source for that please feel free to contact me. 

You are building equity in the house from 2 sources.

The funding source i use does not do primary residence funding.  

They should be able to determine the source of the problem 

We sourced a lender with tremendous experience in the area, who was willing to stretch and get the deal done.

However, financial freedom is what we all seek, and one source of income rarely provides it. 

Private lending with a colleague/family is a very ambitious; if this person is a stranger, I would be even more cautious since the funds might come from atypical sources.

I would personally want to know I had an exit if a deal came to me.And in Sac if that is were your targeting your one of a thousand doing this.. you need to be able to react .. put up EM and beat the competition to the deals.. all this seo website that is easy its all out sourced.. but it does not close deals for you..

Also to note, basement units generally get less rent than comparable main living units.A final thought, you didn't mention a heat source. 

Note I am not a lawyer or am I giving legal advice especially surrounding source of income.