That's a little different than the traditional broker, who represents the buyer’s or seller's interests.

Pre-covid, one could find and acquire adequate traditional cash flow deals, but unfortunately, that is no longer the case. 

So he demos, rough in and then mud in like two weeks. 

He rented the equipment and everything and the joke is that he was down in this huge huge huge hole and it started pouring rain and it became this big mud/death pit and he got stuck down there.

I note similar town-homes with traditional tenants rent for $1,200 in the area.The Third property is next-door to the first, and the details are the same.

Is there anything that would make it difficult for us to get a traditional loan after?

However, looks like you're missing the part where the homeowner (seller) gets a piece of that option fee, and what you're talking about is a variation from a traditional lease option, so you'll need to do things a little bit different to account for those variations.Look at it this way - if I'm going to offer you (tenant / Leasee) a 2 yr lease option at 200k:Leasee is going to make a down payment of $20k  (this can be whatever you negotiate).Principal is now $180kMonthly rent payments of $1,300 for 2 years.  

Bridge lenders offer a non-traditional form of financing often referred to as ‘bridge loans’ or ‘hard money’ loans.

Within that year you could refinance to a traditional mortgage and then move out.

Or perhaps I can talk to other lender (like B2R) who more focus on the bankability of the apartment instead of focusing much on my personal DTI as most traditional banks do.