Perhaps you can work with one of your friends who could carry the mortgage?

Your reputation in this business makes all the difference.You would include the improvements in the equity raise.Offers always carry more weight than LOI on small deals like this.

He is looking for a down payment up front(a little more than I would like), and then to carry a note on the remaining sum of the purchase price.

Or are you expected to carry on like a regular tenant because you have no other residents? 

I am motivated to lend you the maximum my underwriters will stand since I personally get a microscopic percentage of what I lend you.If there is extra equity for you to take out from the property under the above caps then sure, you can use it for the extra expenses like carrying costs.

Your out of pocket expenses are cut dramatically, even if you are paying high interest rates during the hard money carrying period.  

Experience   ( capacity to transact)1 a,   Character  this one is huge with small commercial banks.. it carried me personally through the GFC with my bank2.

If we make some additional changes to make the building more efficient turning some 2 bedrooms into 3 we are confident it would cash flow around $73,000 and has the potential to be around $98,000.The current interest rate is 6.5% and that is being carried by the owner due to the bank not being able to qualify the property due to the low rent roll.

He also wants to see all of the numbers, cost of purchase, carrying costs, sales costs, taxes, profit, how it will ramp up, how you will use the profits, where the new properties will be coming from, contingencies, reserves, who is doing what, employees, sources, methods and so on.

As part of cash out, prior deferral needs to be shown again (carried over) in the Tax (form) year in which refinance was done or just the debt portion. or4.