You will need to review the contract to confirm they violated a provision, so you can send the proper termination notice without penalty.

Hopefully the seller keeps making payments or the balance owed will go higher and higher during those 6-12 months with interest, penalties and fees. 

I would rather do that than dump all of it into one down payment @Kai SoremekunDSCR Loans require at least 25% down for purchase and have high rates with 3-5 year prepayment penalties.

My husband does have a 401k, which we gave a quick look at pulling money from for a down payment, however the tax penalties would only provide us with a loss. 

With a DSCR loan, a higher required down payment, higher rates and pre-payment penalties are very common.

Conventional will have better rate, lower upfront costs, and will NOT have a pre-payment penalty.

and see which is better over all because on commercial fixed notes you do take on the terminal risk of the loan potentially ballooning in year 5-10 and its something you have to plan for.Savvy investors always keep multiple take out (payoff lenders) options to ensure their debt is well positioned and if anything happens they'll just jump on to the next option.Commercial notes also might have prepayment penalties too so just be careful with those depending on what your game plan is for a property.

> can be anything, case by case, they need an exit strategy, they will loan on something they are willing to foreclose upon, desirable property, maybe your income is net negative…Often have prepayment penalties and don’t mess around when you change your plan.

Third, Make sure your contract is as detailed as possible especially. how draws will / be paid, who is responsible for buying materials, how to handle change orders, and finally set up penalties on your contractor for going over schedule.

LA is a 5% initial penalty and 1% a month, so first year is a 17% return.