Its kind of hard to explain without a physical example but I tried my best to.  

They lender find out eventually... might as well be now. 

Few quick pros and cons off the top of my head, having bought seconds for a few years.Pros: - cheaper to get into (you can get high quality ones for 10-20k)- safety through diversification (you can buy more notes with the same money and spread your risk that way)- generally much higher returns (we've had a lot of notes with 100%+ returns and recently got one with 1,000%+ return)- typically don't have to deal with taxes, HOAs, and as with all notes don't have to deal much with physical propertyCons:- Less inventory available, with rising prices and more competition- Lots of underwater inventory so you often run the risk of a) getting wiped b) having note sit in the drawer for a few years- Have to deal with scum-of-the-earth bankruptcy attorneys- Requires much more interaction with the borrower, since foreclosure is rarely the optimal play- Fixed costs are killer on 2nds (ie 1 foreclosure on a 50k first is a ton cheaper than 5 foreclosures on 5 10k notes, so is servicing etc)There are a ton of pros and cons to both, and both are great.

the title company would have no idea the unit was expanded, they don't physically inspect it. 

I would say first do research on areas that are close by, I invest in NJ and it has many great areas for investing and PA as well because no matter how much research you do online until you're actually physically in the area you won't get a real feel of the area.

If interest rates continue to rise over the next few years the banks may very well be required to enforce these clauses.

If you are going to be paying rent anyway, you might as well be 'paying yourself' and get that equity buy-down at the same time.

If you can't see yourself settling in a house that's worth less than half the value of your current one, (or, rent a property for less than half what you'd get by renting out your current one at the same time), then your cash-flow-increasing goal may well be severely limited?

To add injury to insult with that home purchase you are physically stuck and have his huge mortgage payment that constricts cashflow.

I just did a lot of the physical work and didn't learn about the money part of it.