That is essentially a second mortgage. 

Thank youFor mortgage purposes, this is typically not needed if the current home will cashflow as a rental, fyi.

If you buy/sell enough properties you'll find that the appraisal typically comes in very close to the contracted purchase price.

But the guys at PAC are typically very responsive in their work from what I see.If you buy a performing note from them (or most note investors) you are buying it as-is and if the borrower stops performing, you're on your own.If you invest in a 506(c) that is different in that it provides a preferred return and you can ask for the history of the fund.

@Andrew Boettcher Because I could still rent somewhere else for $1000 and get paid the $1000 from the unit which essentially cancel each other out.

Even if they have a company website and supposed references, and if they are currently in the business the background check is essential. 

Is it typical in a JV arrangement for the newbie to provide ALL the money and the experienced person to provide the know how and actually do the work (most of it anyway) for a 50/50 split? 

I'm new so take it for what it's worth.Sellers typically use pro forma numbers, which are usually BS.

This will be a typical term for commercial financing.  

-meter that works well and I know when a tenant is being genuine and when they're lying to me (the inherited tenants are typically the ones who try to B.S. me).