You can't process or underwrite the financing agreement. 580 is FHA, not all programs are available everywhere, besides, investors aren't qualified to originate, process or negotiate financing terms between a seller and an end borrower unless they are licensed.

Are you going to earn more by getting rid of debt, clearing that interest rate after taxes or is the use of the borrowed funds more valuable.

As for the death of the borrower.

There are a lot of variables, including state and local law and whether or not the occupant is really the borrower or a bona fide tenant (or family member of the borrower).

The borrower is ultimately in control of that destiny.

I have only done two rehabs and I at least had the luxury of borrowing from my 401k to get me rolling.  

The property is run down, needs a total rehab, and looks like a few squatters have been borrowing it.

So, you could borrow $76K in this case.  

This company has a launched a peer to peer lending platform where is matches borrowers with lenders seeking yield.

I now utilize debt when I have a substantial spread between what I can conservatively earn on an investment vs what I can borrow the money from a lending institution.