I'm in that space in between traditional financing and true hard money.

I think that most people's bad experiences with the program stem from not working with a team that knows their way around the program.You're right that appreciation is not guaranteed - but that is true whether you go with a 203k or a traditional purchase.  

After purchase will convert hard lender to private lender with lower interest rate for traditional loan.

OPTION 3Offer the seller to have the property listed and sold the traditional way. 

I would pay finding fee if it cannot happen the traditional wholesaling way.

Reality is, after asking that question, obtaining my license and going through months of learning about real estate,  I see with hindsight my friend was best served by listing and selling it the "traditional" way.  

Most financial planners recommend 10% of the portfolio in real estate, however, since real estate is not considered a "traditional" investment by many,and not fully understood, I believe this is a fairly conservative number. 

We have 5 small multi-family properties, all financed with traditional 30-year fixed rate loans locked in sub 4.75%.  

My current rental properties were both financed with hard money, before paying them off low enough to get a HELOC and simply put the balance on there.I'm now interested in purchasing an additional rental property (4-plex) through a traditional lender, as the 10% interest rate is crushing. 

I feel the seed money can be better used in property investment than traditional stock investing.