Some sellers have not finished either and may view you more positively.

On the positive they pay their rent.It could be a good long term buy. 

I'd be very careful about buying a subordinate position without understanding a reliable exit strategy, a true knowledge and understanding of the liens on the property, payoff amounts, potential title issues, value of property, etc.

There are still many opportunities to generate 12% annualized returns in 1st lien positions.

This is not the time to be loaning money in second position if you've never done this before.

Both of my properties have existing mortgages in first position and the existing first mortgage lenders are recommending a cash out refinance.

--Question--To reduce my housing costs to $0 or cashflow positive I have come up with two potential scenarios....Scenario 1:Move into a two bedroom apartment in Manhattan and rent the extra bedroom to break even on my monthly living costs. 

The city just took the number #1 position from Seattle.

@August HansenI am in a similar position as you are but I have multi family land.

PenFed's HELOC stuff is liberal, their 30YF first position mortgage stuff is more conservative.